Risk Analysis and Audit Software Tools. CIAT Technical Conference Nairobi, Kenya September 9-12, 2013

Transcription

1 Risk Analysis and Audit Software Tools CIAT Technical Conference Nairobi, Kenya September 9-12, 2013

2 Canada Revenue Agency (CRA) Current Environment The CRA is Canada s principal tax authority and is responsible for collecting: All federal income taxes Personal and corporate income tax for most provinces and territories Harmonized sales tax and the federal goods and services tax Commodity taxes (e.g. fuel, tobacco, alcohol) Payroll taxes (e.g. Income tax, Canada Pension Plan contributions) The CRA also administers a number of benefit programs on behalf of both federal and provincial levels of government. 2

3 Approach to Large Business Compliance (ALBC) Launched in 2010 Shift from previous full coverage system to two-tiered risk assessment approach Change in interaction with large business taxpayers and intermediaries Shift in taxpayer expectations and auditor mentality Focus on highest risk taxpayers More targeted use of limited resources 3

4 Risk Assessment Process Tier 1 Review of Large Business entity Corporate governance Compliance risk History of compliance behaviour Segmentation into High, Medium or Low risk categories High risk full scope audit Medium risk issues-based audit Low risk compliance assurance review 4

5 National Risk Assessment Model (NRAM) Tier I What is it? A risk assessment process which allows for an overall evaluation of the occurrence of non compliance How does it work? Auditors examine tax risk factors NRAM Calibration Committee Reviews are carried out Regionally and Nationally in order to ensure that files are evaluated in a consistent matter 5

6 Risk Assessment Process Tier II In depth review carried out by Large File Case Manager (LFCM) and team International Tax and Aggressive Tax Planning Specialists participate as part of this review Process information from different sources, determine relationships between information and determining risk based on many factors Use of Standard Audit Risk Assessment Template 6

7 Standard Audit Risk Assessment Template (SARAT) Comprehensive CRA-developed Excel Workbook tool Helps LFCMs and auditors manage information and document the risk assessment process for large business audits The risk assessment process conducted using SARAT is divided into 3 stages: Stage I Information Gathering and Analysis Stage II Issue Selection and Prioritization Stage III Detailed Audit Plan and Audit Execution 7

8 Standard Audit Risk Assessment Template (Main Control Menu) 8

9 Taxpayer and Audit Information 9

10 Stage I: Information Gathering and Analysis Large list of potential risk factors developed for large business audit, tax avoidance, International and GST All risk issues organized in a different category for review LFCMs or auditors can add any new issues that are not included in the provided list Information from other CRA systems gathered automatically using built-in mainframe macro applications CORTAX T4 Summary CCA Schedule All T2 Schedules Reorganization 10

11 Stage I Information Gathering and Analysis (Control Menu) 11

12 Stage I Information Gathering and Analysis (Datasheet View) 12

13 Stage I Information Gathering and Analysis (Record View) 13

14 Stage II: Issue Selection and Prioritization Allows auditor to assess each risk in terms of audit risk level and priority order - to determine whether risk will be selected or rejected and to summarize the reasons Information gathered from all available sources with preliminary analysis and any issues identified in Stage I flow through to Stage II New issues identified in Stage II can be added or deleted 14

15 Stage II Issue Selection and Prioritization (Datasheet View) 15

16 Stage II Issue Selection and Prioritization (Record View) 16

17 Stage III: Detailed Audit Plan and Audit Execution Perform detailed audit steps Live document that should be updated on an ongoing basis Audit plan and audit report to the taxpayer developed at this stage 17

18 Stage III Detailed Audit Plan and Audit Execution (Datasheet View) 18

19 Stage III Detailed Audit Plan and Audit Execution (Record View) 19

20 Future Plans Working to complement existing NRAM process with new system that will allow automatic ranking of Large Business population based on previous non-compliance National workload development framework Compare risk rankings with national and regional work plans SARAT will remain integral part 20

21 Conclusion Focus on highest priority issues Cost benefit analysis of continuing audit More efficient use of resources Learning from others/sharing best practices (e.g. CIAT, OECD, etc.) 21

22 Thank you! Gracias! Merci! Obrigado! Asante! 22