During tax season, everybody’s concern revolves around preparing to file their taxes in order to beat the April 15 deadline. However, beating the deadline should not be their only concern. More importantly, people and businesses must take extra care about the documents they use when filing.
If during filing the BIR finds discrepancies in your documents, this can result to you being selected for audit. When this happens, a Revenue Officer will be assigned to scrutinize your books of accounts and other accounting documents in order to determine your correct tax liabilities.
How to Avoid a BIR Tax Audit
The BIR tax audit process can be a long and arduous one, so it would be best to avoid it as much as possible. One of the best ways to do that is by hiring an auditor. Hiring an auditor will allow you to:
Take advantage of his extensive experience
An auditor’s general task is to evaluate the validity and reliability of a company’s financial statements. In order to do this, they are required to have extensive experience in the field. Whether you hire an internal or an external auditor, your company will benefit from their professional and systematic analysis.
Aside from analyzing financial documents, auditors can also do other types of audits including but not limited to operational audits (evaluations of workflow and performance measurements), performance or program audits (evaluates whether stated goals have been achieved or whether it can be achieved at a lower cost) and fraud audit (investigates misappropriation of assets, manipulation of data, illegal acts, etc.).
Prepare better for tax filing
In filing tax returns, it is always better to be prepared than sorry. Having an auditor will help assure that all your forms are accurate and have been properly filled up with all the necessary attachments. This lessens the risk of the BIR finding any mistakes or discrepancies that can lead to a tax audit.
Gain impartial assessments
All auditors, whether internal or external, operate under an oath to act independently and objectively in performing their tasks. They are required to have an impartial and unbiased attitude so as to avoid conflict of interest. By acting in good faith and with integrity, an auditor will be able to make a more accurate assessment of your financial documents, processes, and systems, which will only benefit your business as a whole.
Gather new ideas for improvement
Auditing puts the auditor in a unique position as a knowledgeable advisor that allows him to delve into your organization but at the same time still be able to look at it from an outsider’s point-of-view. This gives him a more holistic view of the company, which will not only enable him to give better insights as to what works and what doesn’t but also give suggestions on how to improve your operations.
All these benefits of hiring an auditor will make filing taxes easier and help you avoid getting a tax audit. However, doing so will also make your company experience other benefits that go beyond the tax season.