Multistate Audit Technique Manual

CALIFORNIA FRANCHISE TAX BOARD Internal Procedures Manual Page 1 of 41Multistate Audit Technique Manual _______________________________________________________________________________ 2000 PREAUDIT PROCEDURES The preaudit phase is vital to the audit process. This is the phase where the auditor determines whether to proceed with the examination or accept the returns as filed. If the determination is made to proceed, this is also the phase where the auditor plans the audit and performs the preliminary work. Proper attention to the preaudit procedures will improve the quality of the audit and help reduce total audit time. The preaudit steps discussed in this section are fairly universal for all multistate audits. Once specific audit issues have been identified, the preaudit procedures may be expanded to specifically address those issues. Care should be taken to keep an open mind throughout the preaudit phase. The information available during this phase is seldom sufficient to make any conclusive determinations. By becoming prematurely convinced of the outcome of issues, auditors can fall into the trap of only gathering information that supports a predetermined conclusion. Reviewed: December 2002 The information provided in the Franchise Tax Board's internal procedure manuals does not reflect changes in law, regulations, notices, decisions, or administrative procedures that may have been adopted since the manual was last updated ...