Special accounting schemes: Reviews and auditing
When should the scheme be reviewed?
Special accounting schemes are always agreed for a specified period. At the end of that period, the scheme should be reviewed with the aircraft operator. An initial scheme should be reviewed within no more than 6 months. If an existing scheme is being extended a longer period may be agreed.
A review gives you and the aircraft operator the opportunity to:
- continue using a scheme;
- make changes;
- alter the scope of a scheme; or
- stop using a scheme.
The aim of all reviews is to discuss with the aircraft operator whether the current scheme is producing the right amount of duty in a cost-effective way. If not, then what changes need to be made?
See auditing below for information about conducting reviews at the same time as audits.
Reviewing a scheme early
A scheme may be reviewed early in the following circumstances:
- if the aircraft operator has not operated the scheme in accordance with the agreed conditions, or if incorrect data have been used;
- the structure of the business changes (for example the timetable is changed); or
- unforeseen circumstances arise which may affect the accuracy of the scheme (for example there is industrial action).
Note: Unless the aircraft operator agrees, a scheme cannot be reviewed early for any other reason. A shorter period should be agreed before the formal review if there are concerns about revenue risk in a particular case.
- follow a systems-based, rather than transaction-based, approach to control for all schemes even if the schemes themselves are transaction-based;
- not approve a scheme if you have reason to believe that it will be inauditable;
- conduct audits and scheme reviews at the same time if at all possible.