TaxTMI 
TaxTMI 
Hi All,
Please help me to sort out why provision for tax audit is not done in the books
tax audit fees-provision
08 Jun 2016 
1 Reply 
3619 Views Asked by
Accrual accounting: audit fees recognised when incurred; tax audit fees typically expensed in the subsequent year, not provisioned.
Under accrual accounting, expenses are recognised when incurred even without an invoice, allowing provisions if an obligation exists at year-end. However, because statutory tax audits occur after the accounting year closes, the audit fee is treated as a subsequent-period expense; consequently, no provision is typically recorded in the closed-year books. (AI Summary)
Under accrual accounting, expenses are recognised when incurred even without an invoice, allowing provisions if an obligation exists at year-end. However, because statutory tax audits occur after the accounting year closes, the audit fee is treated as a subsequent-period expense; consequently, no provision is typically recorded in the closed-year books. (AI Summary)