In verifying compliance with the applicable tax laws, audit of receipts is regulated with reference to the statutory provisions as judicially interpreted.
Internal controls are intended to provide reasonable assurance of proper enforcement of laws, rules and departmental instructions. These also help in the prevention and detection of frauds and other irregularities.
Quantum of audit
Around 65 to 70 per cent of the VAT revenue is contributed by the top 100 dealers and the balance 30 per cent by the remaining dealers.
Preparation of working papers
It is necessary that the audit work is properly documented in the working papers and maintained unit-wise.