Tobacco Tax Audit Guide

Audit of the taxpayer’s records is conducted by state field auditor to determine if additional money is owed to the State Department of Revenue.

An audit starts with test internal controls before proceeding with fieldwork. Randomly select three to six months to use as test months. Evaluate the taxpayer' process of recording purchases or sales and reconcile the amounts to the summary data and to the reports. Analyze the results of any discrepancies. If adjustments are necessary, the auditor decides whether to proceed in detail or to consider a sample and projection.