tax audit fees-provision

[Gaurav Gawri]

Hi All,

Please help me to sort out why provision for tax audit is not done in the books

AI Summary

Understanding Why Tax Audit Provisions Aren't in Current Year Books: Accrual Basis Explained A participant in a discussion forum inquired why provisions for tax audits are not recorded in the books. A respondent explained that accounting is conducted on an accrual basis, meaning provisions are made for expenses incurred but not yet invoiced. Since audits occur after the accounting year closes, they are considered expenses of the subsequent year, which is why provisions for tax audits are not made in the current year's books.