The ATO has recently announced its intention to “ensure that businesses are paying the right amount of tax by assessing the integrity and governance controls of business and IT systems”.
To do this, the ATO will request and examine electronic data files.
This means the ATO will be able to interrogate all of your transactions to look for anomolies, inconsistencies and exceptions. They will likely be able to categorise transactions by size, nature, date etc.
These e-Audits will significantly increase the ATO’s ability to drill down and zero in on transactions and entries of interest to them. It will also facilitate a greater ability for the ATO to compare various aspects of your business to those of your competitors and others in your industry.
So - business owners need to be fully confident about the integrity of finance and accounting systems. The ability of staff members to access and make entries into accounting systems must be controlled and monitored through passwords, authority levels and regular overviews.
Specifically in regard to the SME sector, the ATO have stated recently that they are interested in:
- Undeclared income
- Unexplained wealth or lifestyle assets
- Private expenses incorrectly claimed
- Unpaid superannuation
- Cash only businesses or those with low usage of merchant facilities through their bank
If you wish to know more about ATO e-Audits or have any concerns about the integrity of your systems, please speak with your usual hmh contact Director.