Auditing is a key important area in the financial system as it maintains transparency in the process. Auditing of Indian companies is getting processed according to the Income Tax Act of 1961. Many organizations nowadays are proving online tax audit services at a very affordable price range. You can hire them the preparation of audit reports for your organization with details.
Verifying the tax details according to the submitted financial documents of the company is the main work of the tax auditors. The process might look very simple but has some points of complexity in it. To get it simplified, you must understand the entire mechanism of tax auditing properly. Added to this, you must know the law and rules regarding the compilation process.
This article will systematically provide you with the key details about online tax auditing in a simplified process. To begin with, you should know the exact meaning of tax audit, which is detailed below.
What is Tax Audit?
The process of verifying the account of the taxpayer with the available receipts according to the income tax law is called a tax audit process. Mainly, the auditors will get deployed with the function to check the tax statements of the company and confirm their validity.
The income tax act talks about three kinds of audits for organizations, which are like;
a) Internal audit
b) Revenue audit
c) External audit
Nowadays, companies are opting to get their tax statements audited online. There are many service providers you can find for auditing your accounts online through the digital medium. Before that, you must understand the key objectives of why you go for such a decision.
Objectives behind Tax Audit
Here are some basic objectives that drive the need for auditing in a business operation. When you choose an auditor to conduct an audit in your firm then you must check out these objectives coherently.
a) To eliminate the malpractices in the accounting process completely. Only auditing can bring out the loopholes in the system and point them out accurately.
b) To check the accuracy rate of the accounting compilation process in the system. The auditor will suggest more ideas after conducting the audit for improving the accuracy of the system.
c) To bring changes in the tax calculation procedure and tax filing mechanism, if there any issues are found.
What are the Rules Regarding Tax Audits?
Mainly, the working procedure of tax audit follows the rules of the Indian income tax, 1961. The entire auditing process must get supervised by an appointed Chartered Accountant (CA) for the company. You can share your login credentials with the CA to initiate the online tax auditing process. The following sections are followed appropriately in conducting the tax audit online.
1. Section 44AB
2. Section 44AD
3. Section 44ADA
The CA will assess all your financial statements and bank details after logging into your system. After finishing up the process, the CA will update you with the audited financial statement and other supporting documents.
Key Advantages of Tax Audit Services
Now, after conducting the auditing process online, you can have the following advantages in your financial system.
- Check originality
The auditor will confirm all the entries that you have made into the system after verifying them with supporting documents. Hence, you can ensure the originality of your tax documents after completing the due process.
- Enhance business credibility
The credibility of your business operation will get increased if the auditor has not found any error in the system. Even if they found errors they will suggest ideas and provides measures to improve the system. Therefore, this will make your business operation efficient and transparent.
- Generate automated reports
Conducting a digital audit would take very little time to finish. The result would get published immediately after completing the due process. Here, the auditor will use an automated system to generate and publish the reports.
- Saves tax
The auditor will suggest you some measures which you can use in your documentation process next time to save some taxes. Choosing online tax auditing will help you to compile tax saving formulae in your tax statements.
You can choose an online audit service provider for getting the audited tax report quickly. These service providers are working with highly experienced CA consultants for the preparation of audited reports online. They will ensure 100% accuracy in the preparation of the report.
