What Is Tax Audit Report?
The format of the audit report is identified by the income tax department for specific individual. The outcome of audit is divulged through tax audit report which carries the viewpoint of the auditor in the financial statements.
As Lancaster said,” a report is a statement of collected and considered facts, so drawn up as to give clear and concise information to persons who are not already in possession of the full facts of subject matter of the report.”
there are 3 types of report
#1
The opinion is clean or unqualified. This report notes the auditor’s view that the financial operations and reports of the organisation are accurate and appropriate with all evidence provided for review.
This report notes the auditor’s view that the financial operations and reports of the organization are accurate and appropriate with all evidence provided for review.
#2
The qualified opinion. This study is generally optimistic, as it reveals that in the financial documentation there was nothing wrong with the auditor. A competent opinion does, however, mean the audited firm has not met the UK GAAP requirements.
This report includes an additional segment on whether an unqualified viewpoint cannot be accepted.
#3
The adverse opinion. I hope that you will never have to face this report as it is the toughest type you get following an audit. Unfavorable decisions indicate that the firm did not meet the GAAP requirements established by the UK and that the auditors find differences in the financial statements of the company.
This can be caused by a flaw in the audit process, but it may also suggest a business scam. An adverse opinion means that before the company is audited for a second time it must check the documentation.
what should be included in report
Fixed contract as to what the report of an auditor can include and how different elements must be reported.
Reports of the auditor shall meet with agreed requirements provided by regulatory bodies. Standards such as those developed by UK General Accounting Standards (UK GAAP) support external consumers in ensuring that the auditor’s judgment is focused on a widely agreed basis for the integrity of the financial statements.
A standard report of the auditor asserts:
- The audited business and the process of its accounting
- The auditor's responsibility and report
- Reservations (if any)
- Closing statement
- Additional information*
- A briefing from management*
- Date and signature of the auditor
Form 3CA, 3CB, 3CD, 3CE
The audit report format is defined by the Department of Income Taxation, with specific details. Form 3CA and 3CB is an auditor’s report while form 3CD is a declaration of tax audit information.
Tax audit report for taxpayers with technical and company profits obligated to audit accounts under every other statute (other than Income Tax Act).
Tax Audit Report for a taxpayer who does not have a corporation or technical income to be audited by any other regulations (other than Income Tax Act).
A Tax Audit report on a taxpayer that is a non-resident or international corporation that collects a professional services royalty or charge.
