A tax audit by the Federal Inland Revenue Service (FIRS) is a significant event for any Nigerian business. Responding to audit requests in a timely and effective manner is essential to ensure a smooth and successful audit process. The audit phase is an opportunity for businesses to demonstrate their commitment to transparency, cooperation, and compliance with tax laws. In this article, we will present effective strategies to help businesses respond to FIRS audit requests efficiently and effectively.
- Prompt Review of Audit Notification:
Upon receiving an audit notification from the FIRS, review it promptly. Understand the scope of the audit, the timeframe, and the documents or information requested. This early assessment will help you prepare adequately.
- Appoint a Contact Person:
Designate a knowledgeable and authorized individual within your organization to be the point of contact with the FIRS auditor. This ensures consistent communication and prevents miscommunication.
- Organize Documentation:
Gather and organize all relevant financial documents, records, invoices, receipts, contracts, and any other requested information. Ensure that the documents are well-arranged and easily accessible.
- Consult Professionals:
Engage a tax professional or accounting firm experienced in Nigerian tax laws. They can provide guidance on compliance, documentation, and best practices for responding to audit requests.
- Clear and Accurate Responses:
Provide clear and accurate responses to the FIRS auditor’s inquiries. Avoid making assumptions or guesses. If you’re unsure about something, it’s better to indicate that you’ll provide the information later.
- Be Cooperative and Transparent:
Approach the audit process with a cooperative and transparent attitude. Demonstrate your willingness to work together with the FIRS to ensure an accurate assessment of your tax compliance.
- Maintain Professionalism:
Keep all interactions with the FIRS auditor professional and respectful. Avoid becoming confrontational or defensive. Focus on the facts and be courteous in your communication.
- Adhere to Deadlines:
Strictly adhere to the deadlines provided by the FIRS for submitting requested documents and information. Request extensions if necessary and explain the reasons for any delays.
- Ask for Clarification:
If you have doubts or need clarification regarding the audit requests, don’t hesitate to ask the auditor for more information. It’s better to seek clarity than to provide inaccurate information.
- Keep Copies of Submissions:
Maintain copies of all documents and information submitted to the FIRS during the audit process. This helps in case of discrepancies or misunderstandings.
- Stay Updated:
Stay informed about the progress of the audit and any additional requests from the FIRS. Open lines of communication ensure that you’re well-prepared at each stage.
Responding to FIRS audit requests requires careful preparation, clear communication, and a cooperative attitude. By following these effective strategies, Nigerian businesses can navigate the audit process with professionalism and transparency. The audit phase is not only an opportunity to demonstrate compliance but also a chance to foster a positive relationship with the FIRS.
Remember, effective responses during the audit can lead to more favorable outcomes and contribute to a culture of transparency and accountability in the Nigerian business landscape.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com . You can also reach us via WhatsApp at +2348038460036.