Produced by Tolley in association with Nick Watson
  • 08 Feb 2022 09:30

The following Corporation Tax guidance note Produced by Tolley in association with Nick Watson provides comprehensive and up to date tax information covering:

  • Audit of tax
  • Objectives of an audit
  • Key features of an audit
  • Materiality
  • Sample basis
  • Risk based approach
  • Reasonable assurance
  • Other factors considered during an audit
  • Fraud
  • Control testing

Audit of tax

Tax professionals will often be asked to provide input into the financial statement work undertaken by audit professionals. This guidance note is intended to give an overview of some of the key issues when undertaking audit work.

This note is an introduction only and is written on the assumption that users will seek guidance from their audit colleagues on the methodology to be adopted for the audit work required. In particular, it should be noted that most professional firms will have their own audit methodology that builds on the basic auditing standards as issued by the Auditing Practices Board.

Objectives of an audit

According to ISA (UK and Ireland) 200, the overall objectives of an auditor are:

  1. to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework; and

  2. to report on the financial statements, and communicate as required by the ISAs (UK and Ireland) in accordance with the auditor’s findings

Key features of an audit


When planning an audit, an auditor must form a view as to the level at which an error in the financial statements would potentially mean that the financial statements are misleading. In this context, materiality is the magnitude of an omission or misstatement that individually or in aggregate in light of the surrounding circumstances makes it probable

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