Tax audit is the one through which the correct registration and settlement of the financial information of a company or an individual is verified and analyzed, and the fulfillment of its tax obligations before the State is verified.
In an audit, accounting records and documentation containing all the information related to the operations carried out by a company during a certain period of time are examined, analyzed and evaluated.
The objective of the tax audit is to determine the accuracy and completeness of the accounting of the company, because thanks to this you can know the real economic and financial situation of a company.
The information obtained from a tax audit, on the other hand, is useful both for the State, in order to determine whether the company or the individual has effectively fulfilled its taxpayer duties, as well as for future investors, clients or credit institutions interested in Do business with the audited company.
Compliance with the tax regulations of legislation, meanwhile, is a duty of all companies and individuals. Any type of irregularity could result in penalties, since tax evasion is a crime.
An external audit is called one in which an entity outside or independent of the company makes a thorough examination to know its financial situation and verify and corroborate the accuracy of its accounting information. It can be done either by the State, through the authority in charge of this, to prevent fraud to the treasury, or by an independent company with the purpose of analyzing the financial information of the company.
It is known as internal audit that performed by a company to review its operations in detail, verify the accuracy of the data and check the accuracy of the financial statements. It is done with personnel dependent on the company itself, usually in the department responsible for keeping the accounts. One of the things that helps prevent internal auditing is fraud or registration errors.