Field Audit
Categories: Accounting, Regulations
When the IRS personally comes to our home or business to inspect our records and make sure we’re not filing shady tax returns. This is an intense version of the more-common correspondence audit, which takes place by mail and doesn’t involve an IRS agent showing up on our doorstep. (They’ll mail us a letter first, FYI. They don’t show up totally unannounced.)
Sometimes, the IRS inspector might even go to the office of whomever filed our tax return and rifle through their stuff, too. They’re looking for anything that might point to fraudulent or phony tax claims: assets we said we have but don’t actually have, assets we said we don’t have but actually do, iffy business accounting processes, questionable deductions on our returns, etc.
If this whole process sounds like loads of fun, we’re sure it can be. For some. Maybe. But for many, this can be a really intrusive and inconvenient ordeal. Happily, if this happens to us, we can hire a tax attorney to help us out and make sure everything is on the up-and-up. And if we disagree with whatever the field audit’s conclusions are, we have the right to dispute the findings.
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Finance: What is Adverse Audit Opinion?27 Views
Finance a la shmoop. What is an adverse audit opinion and you know deficiency
letter. Okay people this is not good you thought you had good grades but when [Report card is thrown onto the desk]
you got your report card your teachers had opinions adverse to yours... [Report card has bad grades in it]
They sent your parents a deficiency letter you know the one with all those [Mom looks shocked]
D's on it well when it's a company's audit that has similarly gone awry it's [Boss looks angry and employee looks shocked]
the nice way to say it well then it means they didn't count the beans
properly when they gave their financial reports to their investors or whoever
the auditors were serving usually this implies that companies overstated how [Employee counting coffee beans]
profitable they really were or how well they were really doing so tens of
thousands of investors if you know the company was public when this all [Big line of people waiting to invest]
happened paid twenty seven dollars and 32 cents a share when with the real
numbers the stock probably should have been trading more at like you know
fourteen dollars and 27 cents a share big difference well basically an auditor
is saying that yours are not bread-and-butter misstatements no oops [Bean report with the numbers crossed out]
it's more of a dude there were material ie important
mistakes and they were pervasive like everywhere math, science, english, history
your failure it's no mystery that's how auditors talk really
all right well then there are massive losses to massive numbers of people who hire [Protesters on a street]
massive numbers of lawyers who sue you.. massively.. in the world of finance an
adverse audit opinion is a bit like running over everyone's favorite dog [Car goes over a bump]
several times only you're the one who is likely dead meat [Guy reverses and runs the dog over again and the owner comes to fight]