Audit is an inspection, review and control activity that aims to monitor compliance with certain standards. When a person or a company is subjected to an audit, the auditor is in charge of collecting data and analyzing processes to present a report that shows whether the subject or the company is in order and within the parameters of the law.
The adjective fiscal, for its part, refers to that belonging to or related to the treasury (the public treasury or the set of public bodies whose function is to collect taxes and tributes).
These two definitions allow us to affirm that a tax audit is an inspection of the tax situation of a person or a company to verify if they comply with their obligations.
According to DigoPaul, the tax audit, therefore, is a process that consists of obtaining and evaluating evidence about the facts related to acts of a tax nature. The auditor should compare the tax returns and payments with the finances of the auditee to determine if everything is in order.
In addition to all the above, we would have to underline that there are basically two types of audits: internal and external. The latter may, in turn, be of a governmental or private nature.
When carrying out a tax audit, it is undeniable that the professional who carries it out performs an exhaustive analysis of the company in question and its information. Thus, more specifically, you must acquire the maximum knowledge about the structure of that entity, the operations it carries out or the economic conditions it has.
In this way, with these data and based on them, the auditor will carry out a thorough analysis, then inspect and confirm what has been studied, investigate and observe. The result of all this will be the preparation of a final report or opinion, which is made up of two structured parts: a first, in which the procedure carried out is disclosed, and a second where it establishes its opinion.
The State, through different offices and secretariats, usually develops tax audits to ensure that taxpayers are complying with their obligations. In case of detecting any irregularity, the debtor is intimidated to regularize the situation and, depending on the case, can be punished in various ways since tax evasion is a crime.
Large companies also tend to order internal tax audits, in such a way as to ensure that the payment of taxes is being carried out normally.
It is common that what is a tax audit is often confused with a tax inspection, but they are different things. Thus, from the first, it should be noted that it is carried out by an independent professional, that partial opinion is not allowed in it or that he carries it out almost simultaneously with the events taking place.
The second, the aforementioned inspection, for its part is identified because it is carried out by a State official, because an opinion must always be issued, because it has fewer facilities to access the information and because it is carried out after the audit financial.