Can anyone please tell What is tax audit?
and what all should be seen in tax audit for company?
Tax audit is an audit which is mandated for specified classes of assesses under the Income Tax Act. You can refer Section 44AB of the Income tax Act to have a detailed understanding of the persons applicable to this audit..
The scope of the audit is not wide open as the case of a statutory audit and it is well defined. The details that is to be verified in case of a tax audit are given by way of an annexure to the audit report. ie., Form 3CD.
The annexure contains a specific set of clauses and the audit has to be gone around each of the clause to ensure that the information given by the client is correct, accurate and complete. This is the main difference between the statutory audit as its objective being true and fair view.
The ICAI has released a guidance note on tax audit under section 44AB which clearly specifies how the audit is to be proceeded and what are the documents to be verified clause wise and documentation procedures.
This is only the macro picture and the same can be appreciated only if you can do the audit practically...
Hope it is useful...
CAclubindia
