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Did know you: There are 13 pieces of information about your assets a SARS auditor will check when he audits your company?

by , 06 August 2014
If SARS audits your company, it's not just going to look at your documents and records. It'll want to assess your assets as well.

It'll do this to ensure they don't add more net wealth to your company than you claim they do.

If the SARS auditor feels you've misrepresented the condition or type of assets you have, SARS will punish you. This will mean penalties that can go up to 200%!

The best way to prevent these penalties is to prepare, just in case. So here are the 13 piece of information about assets SARS will inspect so you can prepare for when they do...

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The SARS auditor will check these 13 pieces of information about assets

 
The SARS auditor will check if:
 
1. Any wear and tear you claimed complies with the Tax Act.
2. You treated your Vat correctly for additions and disposals of assets.
3. You recouped the correct wear and tear when you sold an asset.
4. You give the correct tax and Vat treatment to fringe benefits.
5. If you use the asset in the production of income.
6. You capitalise your assets and haven't expended.
7. You haven't overstated your wear and tear.
8. You have undervalued your stock.
9. Your deductions and credit balance don't represent disguised provisions.
10. You haven't understated your debtors balance at year-end.
11. You haven't overstated your provision of doubtful debt.
12. You haven't hidden any soft loans in your debtors.
13. You assets actually exist.
 
If the SARS auditor sees any inaccuracies between your assets and the tax you've paid or deductions you've claimed on them, you'll face serious penalties from SARS.
 
PS. To prevent nasty results from a SARS audit, rather find ways to legally pay less tax
 
 

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