Anatomy Of An ATO Audit

Posted on Jan 24, 2014 | 0 comments

The Australian tax office, commonly referred to as ATO has an active system that departments and businesses need to comply with. The system designed to raise maximum revenue from businesses is especially concerned with what the officers could consider to be risk departments. As a business, it is important to have up to date knowledge with regard to the requirements and obligations. This may require you to conduct, your own private self audit, ensuring that you take into considerations all the tax regulations and procedures, to avoid experiencing complications and being found unprepared.


The Anatomy of an Australian taxation department audit, takes serious interest to the credit section of the business. A company that operates on credit, allowing clients and suppliers to pay and be paid within sometime, will find that the credit department draws extra attention. Businesses which are registered and expected to pay full taxes, often put claims on credits without the realization that the Australian Taxation department does not accept such claims. In some cases, such claims may cost the business extra fines and penalties.

In addition, the credit claims often attract personal expenditures drawing interest from the auditors. Where businesses may find it difficult to differentiate between expenses, auditors are more likely to penalize on any slight mistakes and expenditures that have been overlooked in the claims.

Record keeping and maintenance

Another department and area that is likely to have specific attention is record keeping. The business record should be kept up to date, without any slight eras. This may require going through the records periodically to ensure that the taxes paid are actually calculated properly. Australian auditors are trained to dissect and find small eras in records that could in turn be heftily fined. An Anatomy of an Australian taxation department audit, focused on record keeping could unravel the entire business if the records are not carefully maintained.

Complicated departments

Anatomy of an Australian taxation department audit also reveals weaknesses in some departments where the tax laws coincide and sometimes indicate different things. It is important as a business to seek further clarification and further understanding on how to employ the tax regulations in these departments. These include departments such as export of goods, where two different tax laws may be involved. A business may be required to pay extra tax for the specific good exported and/or imported. Failure to comply is often considered as part of fraud. Furthermore transactions completed by a group of companies and businesses, is likely to draw confusion with regard to who is responsible for what amount of tax, and how such records should be maintained.

Before any Anatomy of an Australian taxation department audit, companies should ensure that they have complied with all the regulations. Special attention needs to paid to the departments which are likely to be troublesome. Cash only businesses do not escape scrutiny. In fact departments that deal solely with cash draw even more interest from auditors, with regard to record maintenance. Cash only departments often have difficulty keeping track of cash coming in and going out, and nay slight difference in records is likely to raise questions from the auditors.

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