Internal Audits Fix Financial Accounting Problems –

Internal Auditors Revisited –

HISTORICALLY THE PRESENCE of internal auditors in any business has made a significant contribution toward deterring the incidence of fraud in that business. Internal auditors should play a pivotal role in the Tax Risk Management process by providing the much-needed support and expertise to continuously monitor the controls that are in place in order to pick up on any emerging tax risks. They are also skilled and experienced in identifying potential risk issues and have the know-how to properly investigate these risk issues.

The risk issues that require ongoing monitoring, identifying, and investigating are set out in chapter 8. It is also essential that there is proper interface between the internal auditors and the tax team, with a line of communication open to the BO/CFO and the audit committee, if need be. The entire interactive process with the internal auditors can also be enhanced by implementing some of the following measures:

• Regular meetings should be scheduled with the tax team to report on and get instructions on various areas of concern to perform internal tax audits.

• Work closely with the legal team and external tax advisors, collaborating and exchanging information such as findings, reports, and research.

• Report at the end of each process to the tax team.

• Ensure that the BO/CFO, with board backing, emphasizes the significant role of internal audits to uncover areas of tax risk in the business, with the appropriate budget and the cooperation of all concerned in the business.

• Assess the tax risk and the control put in place and their impact of the financial reporting process, evaluating the qualities of the controls and the reporting process.

• Monitor compliance by the business sectors with the Tax Risk Management strategy devised by the tax team.

In accordance with Circular 230 Disclosure