Key Takeaways
- Topic: What Is a Managed Audit? Is it a Good Idea?
- A managed Audit is when you sit down with the auditor and agree to basically perform a self audit.
- A managed audit formulates a plan that’s kind of a contract.
A managed Audit is when you sit down with the auditor and agree to basically perform a self audit. A managed audit formulates a plan that’s kind of a contract. A managed audit can be a good idea in certain situations because what you’re doing is essentially filling out the auditor’s work papers for them. You submit the work papers to the auditor along with some documentation for them to verify and if everything turns out okay, then the auditor will bless the audit. In doing a managed audit you have the potential to cut your interest rate in half. That can be pretty good savings depending on how much your liability is. However the savings in terms of the interest can be outweighed by the length of time and the resources it takes to complete the audit. Managed audits take a lot of work and if a client lacks the internal resources to do the audit for the auditor, it can be a huge waste of time, cost and energy. The management decisions should only be made with a tax representative in terms of discussing the strategy for the audit. Agreeing to a managed audit is a significant burden and can be a huge amount of work. That decision shouldn’t be made lightly but if you do the managed audit properly and you fill it out and turn it in and it reduces the amount of time that the auditor takes to look at the audit, you can set yourself up for success in certain situations.
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