An audit is a review of the annual accounts and is usually carried out by an independent person or party, or a firm of accountants who are also accredited auditors. It is used to identify whether your business complies with accounting standards and relevant laws, regulations and government directions. Audits can also be of benefit to a business by highlighting opportunities for improved accounting and financial systems. The most common types of audits are usually related to various taxes such as GST and Payroll but can also be for other business areas such as Workers Compensation or Occupational Health & Safety.
To prepare for an audit, it is important to asses all relevant records, tax returns and activity statements. If you do find a mistake in any of your records it is important to notify the Australian Taxation Office (ATO) immediately to reduce the level of penalties. It is important to keep all of your company’s records up to date in order to avoid panic and frustration as well as a mountain of paperwork to deal with, should you be required to have an audit carried out on your business.
Currently, Small and Medium Enterprises are being bombarded with audits to ensure that all their compliance is being met. Authorities are diligently applying the strict application and enforcement of the law, especially through the use of desk audits and questionnaires. The ATO is now conducting audits of SMEs and high wealth individuals to verify if compliance has been fulfilled.
The Office of State Revenue (OSR) is also undertaking payroll tax audits covering grouping and contractors. Many businesses are required to pay Payroll Tax to the OSR. Payroll Tax is a state-based tax imposed on wages that are paid or payable in the relevant state, and is generally applied to the annual payroll of employers/grouping of linked employers. Wages includes most payments for services made by an employer to employees, directors and contract workers who are deemed to be employees.
WorkCover are undertaking workers compensation audits covering contractors, to ensure that employers are paying the appropriate premium.
These authorities all share information and have access to each entity’s data bases, so do not be surprised if you have one audit and it is then followed up by another audit. Data match technology now is in use.
Here at The Quinn Group our experienced team of Accountants, Tax Agents and Lawyers are able to help you with all of your auditing needs. We have extensive experience in conducting audits in many different areas and across a wide range of industries and types of business. For more information submit an online enquiry or call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.