Information about Tax Audit Accounting
Tax Audit Accounting is one of the most essential components of accounting. Audits in the earlier times were mainly done in order to get information about the financial records as well as the financial systems of a business or an organization. In the recent times however the tax audit accounting has begun to include information pertaining to the system like security risks as well as environmental performance, and information systems performance.
Tax accounting method as adopted by the taxpayer should be based on the financial accounting method that the organization has chosen while preparing the financial reports. The tax accounting methods that are used by the tax payers in order to pay taxes are the Cash tax accounting methods, the accrual accounting method and some other methods as approved by the agencies like IRS including combinations.
In case the tax payer wants to change the method of tax audit accounting then he can do so but only with the approval of the secretary of the treasury. The ways in which the tax payer can change the tax audit accounting methods are:
In case the taxpayer wants to revert back to the previous method then he has to take the permission from the secretary of the treasury.
In case the secretary of the treasury is not convinced with the tax audit accounting information as provided by the company then he has the right to change the tax accounting method and recomputed the taxable income to get a clear picture of the finances of the company.
Every country has a specific set of rules and regulations that determines the taxable income of the organization or an individual situated in that state.