The Audit Process: PERCET: (E) establish: basic checks
Individual checks include the following:
- check on registered particulars; and
- check on business activities.
- imports/exports and Single Market trading;
- services received from abroad;
- principal outputs and inputs;
- schemes/methods adopted;
- public notices and explanation of the tax;
- accounting system and adequacy of traders’ records and completion of VAT Returns;
- structure and organisation of the business;
- tax points;
- establishing if self billing is in operation;
- repayment indicators;
- repayment inhibits;
- check on Bank/Building Society accts;
- rulings/Decisions; and
- visits to INTRASTAT traders not identified as Supplementary Declarants.
Following on from the above, further basic checks using the trader’s records, and credibility tests against the risk identified by Sift must be undertaken on every full visit.
Basic checks include:
- arithmetic checks;
- data integrity and completeness;
- comparison of the D1600 to the trader’s VAT account;
- checks on the build up to the VAT account;
- annual accounts comparisons;
- systems tests; and
- completion of the EF accounts analysis.
During the course of carrying out the basic checks, or at other stages in the audit, various situations may become apparent, which may require a change in your approach.
The following is not an exhaustive list, but covers the most common situations.