All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Effective audit management starts with “respect”, says panel

Taxpayers need to treat external auditors with “great respect” despite the authorities having officials with “mixed abilities”, said a panel on effective audit management.

Speaking at International Tax Review’s Indirect Tax Forum today in London, a panel comprising of an adviser and two taxpayers, spoke how businesses need to take an auditor seriously if an audit is to be completed as pain-free as possible.

“If you treat auditors like idiots then you will have a problem,” said Matthias Feldt, head of the VAT group at ThyssenKrupp.

Marc Welby, a VAT partner from BDO, concurred with this approach.

“You need to explain everything to the auditor. However, [within HM Revenue and Customs in the UK] the personnel have mixed abilities. Some are very clever while others do not know what they are doing,” said Welby.

Despite this criticism of HMRC’s officials, Charles Middleton, a senior corporate tax executive from British Land, said that taxpayers need to be aware of a shift that HMRC and other revenue authorities are now treating audits.

“Authorities are now working on a more real-time basis and won’t often wait for returns to be filed before investigating a company’s operations,” said Middleton.

“You need to treat the auditors with great respect as they are the ones with the power,” said Feldt.

The panel also spoke how best to manage audits in foreign jurisdictions.

“Face-to-face meetings are key as this will give you the opportunity to explain the situation and answer any of their questions,” said Welby.

The panel concluded that the best method to effectively manage an audit is to document all processes and ensure that you portray confidence to the auditor.

“If you can’t convince the revenue of your confidence in your system, then you have a problem,” said Welby.

“You need to bring the auditor up to speed as quickly as possible so that no time is wasted on needless discussions,” said Feldt.

More from across our site

Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
But experts cast doubt on HMRC's data and believe COVID-19 would have increased the revenue shortfall.
EY’s plan to separate its auditing and consulting businesses might lessen scrutiny from global regulators, but the brand identity could suffer, say sources.
Multinationals are asking world leaders to put a scale on carbon pricing to tackle climate change at the 48th G7 summit in Germany, from June 26 to 28.
The state secretary told the French press that the country continues to oppose pillar two’s global minimum tax rate following an Ecofin meeting last week.
This week the Biden administration has run into opposition over a proposal for a federal gas tax holiday, while the European Parliament has approved a plan for an EU carbon border mechanism.
12th annual awards announce winners
Businesses need to improve on data management to ensure tax departments become much more integrated, according to Microsoft’s chief digital officer at a KPMG event.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree