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INFRACTIONS AND CRIMES - Coggle Diagram

- - - - Orta (1995), [Cited by Sánchez (1996, p. 221)] defines the theory of evidence in auditing as "the set of propositions that make up the audit process connected in an orderly and logical way, whose objective is to give an explanation about of the audit opinion issued, "dividing the auditor's entire reasoning process into two major stages; The first one that the theory of obtaining the evidence or the design of the audit program deals with, requires a logical process of reasoning aimed at determining how to obtain it.
- - - - We must remember at this time that the auditor's opinion is manifested both in the audit report and - privately or privately - in the letter of recommendations or report on internal control [Cañibano (1993, p. 143), defines the report on internal control as a by-product of the audit of financial statements, whether complete (opinion on financial statements) or limited (special investigation of certain aspects of financial statements)].
- - - - For this reason, it is not difficult to understand that the auditor - regardless of whether or not he exercises tax advisory functions - in extreme tax situations, will find himself in the position of justifying his position before those responsible for the entity, who are ultimately the contracting you, and, before including a tax exception in the report, you should mainly ask yourself the following questions:
        • If you have informed the entity of the actions that could be carried out to avoid the circumstances that motivate the exception, for example, correction of the financial statements or presentation of supplementary statements.
        • If, after such action by the auditor, the circumstances that originate the discrepancy (s) remain.
        • If the violation of the rules is significant enough to be considered in the report.
        
        Regarding the substantive aspects of the company's fiscal situation, which, if significant, could appear in the audit report as we will see below, they can be summarized as:
        • Deficiencies in the forecasts made due to errors in the declarations, both basic and type.
        • Forecast deficiencies in known inspection records.
        • Clarifying specifications regarding the conditions and terms in which fiscal reserves may or may be affected or distributed.
        • Errors in the accrual of taxes.
        • Probable or possible contingencies of difficult or, where appropriate, impossible to assess.
        • Contingencies and uncertainties due to appeals filed and pending resolution.
        
        It is not easy for the auditor to abstract from other reflections such as those that Alonso Ayala (1998, p. 22) rightly collects when writing: "(…) an exception for fiscal contingencies in the audit report, may have for a future Tax Inspection a great importance, being able to even constitute a basic support for the Administration.
        In fact, an effect, in Anglo-Saxon terminology, of "feedback" can occur, since precisely because the auditor makes a reservation in his report, said possible contingency may have a greater probability of occurrence. "
        
        We cannot forget, in this sense, the increasing use that the Spanish tax administration is making of audit reports, [In relation to the Spanish case, we understand that the entry into force of Law 43/1995, on Corporation Tax, By establishing the adjusted accounting result as the tax base, it opens up even more the possibilities of using the audit report by the tax inspection. In this regard, Arenas and Garrido (1999, pp. 525528) can be consulted, where the importance that an accounting result accompanied by an audit report may have without qualifications, in the presence of a tax inspection, as well as the importance that the accounting results may have. different types of exceptions, not only those of a fiscal nature, in the performance of the inspection; Among the latter, we think that the exceptions that come from recommendations aimed at increasing the result recorded by the entity will have a special effect.]
        Something logical and in line with what happens in pioneer countries in the development of the audit function.