BIR seeks erring independent CPAs
MANILA – The Bureau of Internal Revenue said it has started writing “show cause letters” to independent Certified Public Accountants who issued unqualified opinions in the audit reports of their clients’ financial statements which were verified containing material misstatements.
BIR officials said they are doing it to further improve tax compliance and ensure the payment of the appropriate taxes by taxpayers.
This development was brought about by big understatements of declared sales and revenues and, consequently, underpayment of taxes, as discovered through the BIR’s Third Party Information System.
Records of the BIR show that while the Auditor’s Report expressly stated that the financial statements present fairly the financial position of the taxpayer, a comparison of the declared income of a taxpayer (per income tax return) and data gathered from third party sources like purchases from suppliers showed otherwise.
For instance, one taxpayer declared gross sales of P397 million as certified by an independent CPA, while third party sources revealed purchases amounting to P645 million.
Obviously, in this example, the sales data that should have been declared would have been higher in the normal course of business, the BIR said. PNA
