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Audit Methods - Detail vs Sample

Taxpayer Rights During an Audit

Audit Methods - Detail vs Sample

Generally, the auditor's first step is to review the accounting, tax accrual, and reporting systems and evaluate the internal controls within each. If tax errors are identified, either of two types of audits can be performed:

  • Detail audit:
    • The auditor may examine all business records for the entire audit period.

     

    • Sample audit:
      • The auditor may use sampling methods. Errors found in representative samples of business records are projected over the entire audit period. Sampling provides accurate results with significant savings of time and manpower for the State and the taxpayer. In either method, if the records are inadequate, the audit is based on the best information available.
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