Introduction
An audit is a formal review or impartial examination of a company’s or firm’s financial records and statements, often resulting in an official report prepared by an independent body. Audits can take several forms under different laws, such as company audits, statutory audits, cost audits, stock audits, and so on. A tax audit, specifically, is an inspection of a taxpayer’s accounts conducted to ensure accurate computation of taxable income, making it easier to file Income Tax Returns (ITRs).
Objectives of Tax Audit
The main purposes of a tax audit include:
Ensuring that the taxpayer maintains complete and accurate financial records, with verification by the auditor.
Reporting significant findings such as discrepancies, non-compliance with income tax laws, or tax shortfall.
Highlighting observations or irregularities detected during the auditor’s review of accounts.
Helping tax authorities verify the accuracy of income tax returns submitted by businesses or professionals.
Facilitating proper estimation of total income and validation of claims for deductions.
Get a Consultation by Expert
