Revenue Audit IDEA Software

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trevork

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I am a director (sleeping/non-executive) in a small company which has been selected for a revenue audit. We have a computerised accounts package and I have heard that revenue have software (IDEA) that can interrogate the accounts and search for anomalies. It would be comforting to know what revenue may find during their interrogation so as to have checks done and explanations on hand should they arise during the audit.
Would anyone know of tax advisors/ accountants that may be able to provide this service? My Accountant is looking into this himself. Note I am not expecting anything to arise but forewarned is forearmed. Thanks
 
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Sorry, I'm not entirely clear on what you're looking for - is it that you want someone to come in and pre-audit the company using IDEA? That sounds expensive, particularly if you don't think there's problems in the first place. Also, lets say you do pay a firm to come in and interrogate your records, and they don't find anything, but the Revenue audit still throws up a tax liability - the firm won't have any obligation to you, their engagement letter will make it quite clear from use of terms such "reasonable assurance" etc...
 
thanks Mandelbrot for you reply.
My only concern is that the computerised till system was implemented during the period under audit review, and during its initial weeks of operation there were operating errors from staff due to unfamiliarity with the system, such as entering incorrect receipt figures that needed amending to agree with the cash in hand. These are all fine as the adjustments were made and noted on the weekly print outs, but I am not sure what else there could be.
I understand that some tax accountants provide this as a service and it is something I would like to avail off for peace of mind.
I know that it is not a guarantee that something else may not come up during the audit.

I had read that the AITI provide training for its members in using the software, so I would just like to avail of the service if possible.
thanks
 
Hi as far as I am aware Revenue only use IDEA on large clients where they use the software to interrogate the data.
 
This software is now used on small audits as well. They come in with a USB key and download everything.

I know a practice who has bought this software as he is a tax consultant and does a lot of this area. Send me a pm if you want to know the name.
 
mandelbrot said:
Sorry, I'm not entirely clear on what you're looking for - is it that you want someone to come in and pre-audit the company using IDEA? That sounds expensive, particularly if you don't think there's problems in the first place. Also, lets say you do pay a firm to come in and interrogate your records, and they don't find anything, but the Revenue audit still throws up a tax liability - the firm won't have any obligation to you, their engagement letter will make it quite clear from use of terms such "reasonable assurance" etc...
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Hi mandelbrot

I do think it's advisable to get a pre-audit done.

Many years ago we had a VAT audit. I knew that everything was kosher but did some spot checks just in case. I was shocked to find that with a change of staff, the new person thought that there was no VAT on exports. We had a few weeks before the Revenue arrived to go back and get VAT numbers from our clients and to issue new invoices to those who were liable for VAT. So when Revenue arrived in, everything was on the way to being kosher. It could have been very embarrassing if Revenue had discovered it before we did.

Brendan
 
Brendan Burgess said:
Hi mandelbrot

I do think it's advisable to get a pre-audit done.

Many years ago we had a VAT audit. I knew that everything was kosher but did some spot checks just in case. I was shocked to find that with a change of staff, the new person thought that there was no VAT on exports. We had a few weeks before the Revenue arrived to go back and get VAT numbers from our clients and to issue new invoices to those who were liable for VAT. So when Revenue arrived in, everything was on the way to being kosher. It could have been very embarrassing if Revenue had discovered it before we did.

Brendan
Click to expand...

+1

Worse than embarrassing Brendan is the fact that the opportunity for voluntary disclosure are lost once the Revenue audit inspector begins their examination of the books & records. So its helpful & much cheaper to uncover & disclose in advance any errors that appear on in the records.
 
Tommy/Brendan, totally agree with the points ye make - what I was getting at was that in a high volume / cash business of the type which IDEA is generally applied to, the owner/manager needs to know what is going on and generally has some sort of controls in place themselves to protect their own interests, and if they are getting any kind of service from their accountant the normal year-end process will give them assurance that these work and that their figures are materially complete and accurate.

The type of issue Brendan refers to would hopefuly be picked up on at that stage and be rectified by way of self-correction, but certainly should be picked up on when the mind has been focussed by the knowledge that a revenue audit is imminent. This doesn't/shouldn't require the application of fancy auditing software such as IDEA.

I suppose the fundamental point I'm making is, if you need IDEA in order to be satisfied that you won't have a problem in the event of a revenue audit, then you probably need it every year when you're doing the year end figures..! And if as the business owner you're happy that neither you nor your employees are fleecing the business, and that your accountant is on the ball, then you probably don't.
 
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