Examination of Accounts for Tax Auditing
This practical guide will help tax auditors to identify material defects and distortions in accounts prepared with the wilful intention of avoiding the proper taxation of income. Those tax auditors who are not well-versed in accounting methods, procedures and principles will also find this a useful guide to enhancing their general understanding of accounting practices, enabling more effective scrutiny of business accounts.
Contents
Foreword
1. Scrutiny of business accounts for tax audits
2. How to make a pre-audit analysis
3. How are final accounts generally prepared?
4. Profit and loss account
5. The manufacturing account
6. The balance sheet
7. Important points regarding the balance sheet
8. Checking the method of accounting
9. How to examine some critical aspects of accounts
10. Methods of reducing income to avoid taxation
11. How to read a balance sheet
12. What factors to consider outside the balance sheet
13. How to detect bogus cash credits and loans
14. How to detect inflated overheads?
15. Revenue expenditure admissible as a deduction
16. How to determine admissibility of expenditure
17. How the courts have disallowed expenditures
18. How business income is diverted to avoid tax
19. How to check the under-reporting of project investments
20. How to calculate ratios for financial analysis
21. Approved accounting standards
22. Checklist for review and practice
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