Research On Application Of Risk-Based Tax Audit In M Real Estate Enterprises

With the continuous evolution of modern audit theories and audit techniques,the replacement of the conventional book-based audit with the risk-based audit forms the mainstream.There are great changes taking place about the application model of audit theories in tax audit.Risk-based tax audit comes into existence on the basis of the complexity of large enterprises' tax audit and the natural desire of tax audit for advanced auditing theories and techniques.While many tax departments are trying to apply the risk-based tax audit on big taxpayers of industrial and commercial enterprises and banks,they lack systematic researches and the summary of application experiences.Real estate industry,as the cornerstone of local economy,is one of the main tax sources for local taxation offices.Real estate enterprises are considered within the industry of higher profits but failed to make correspondent contribution in taxation in practice.There are many difficulties in the tax audit of real estate enterprises because of their long project circles,complex business dealings and the influences of external policy changes.The traditional empirical,book-checking style tax audit models have become obsolete in dealing with the more and more sophisticated tax evasion measures of real estate enterprises.With this background this paper chooses to focus on the research of risk-based tax audit on real estate enterprises so as to provide hints and references on how to apply risk based tax audit into other special industries by other taxation departments.Risk-based tax audit,by basing on the assessment of taxation risks,applies the scientific flowchart to identify the risks and forms the proper key audit areas and procedures.This paper,using Company M as example,conducted the risk assessment by checking on its external and internal information,preliminarily identified 30 particular risk points and narrowed down into 18 taxation issues by further applying the control tests and substantive procedures,which found CNY11.25 million tax shortfalls with penalty notices issued.By analyzing the example of Company M,this paper also summarized the possible taxation risks that exist in the accounting of income,cost and expenses of real estate enterprises and outlined the measures in enhancing the risk based tax audit efficiency in terms of audit plan design,risk evaluation method,audit worksheet as well as work organization in order to provide an experimental reference on the application of risk based audit in practice.