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[ Audit System Manual- TOC ] [ Ch 1 - Introduction ] [ Ch 2 - Preparing for an Audit ] [ Ch 3 - Conducting the Audit ] [ Ch 4 - Completing the Audit Forms and Schedules ] [ Ch 5 - Audit System Screens ] [ Ch 6 - Miscellaneous ] [ Ch 7 - USDOL - Tax Performance System ] [ Ch 8 - Computer Fundamentals & Hardware ] [ Appendix ]
[ 1.1 - Objectives of a Field Audit Prg ] [ 1.2 - Definition of a Field Audit ] [ 1.3 - Purpose of an Audit ] [ 1.4 - Authority to Review Records ] [ 1.5 - Classification of Audits ] [ 1.6 - Audit Scope ] [ 1.7 - Required Audit Scope ] [ 1.8 - Tolerance/Expanding the Audit ] [ 1.9 - Audit Quota ] [ 1.10 - Audit Selection ] [ 1.11 - Audit Assignment Control ][1.12 - Components of a Completed Audit] [1.13 - Review Process for Audits] [ 1.14 - Audit Retention ]

Chapter 1:    Introduction

comments to: Tax Department

1.2    Definition of A Field Audit

A field audit is a systematic examination and verification of an employer's books and records covering a time period for which the employer is liable for reporting under the Law, or is found to be liable as a result of the audit.

1.3    Purpose of an Audit

An effective field audit will accomplish the following:

  1. Determine the correct total and taxable wages paid by the employer during each calendar quarter of the period being audited, and determine the amount of contributions, interest, and penalties required under the TUCA to be paid on those wages.

  2. Reconcile the audit findings with amounts the employer has already reported to the Commission.

  3. Determine the employer's financial ability to pay UI tax obligations.

  4. Identify any additional workers and/or total or taxable wages that were incorrectly reported, or not reported at all by the employer.

  5. Provide a cost-effective method of promoting employer understanding of an employer's rights and responsibilities under the TUCA.

1.4    Authority to Review Records

The agency and the Accounts Examiner as its authorized representative are empowered to examine (audit) the records of a subject employer or an employing unit to administer and assure compliance with the Law.

Section 301.081(a)(b) of the TUCA states:

"Each employing unit shall keep employment records containing information as prescribed by the commission and as necessary for the proper administration of this title. The records are open to inspection and may be copied by the commission or an authorized representative of the commission at any reasonable time and as often as necessary. The commission may require from an employing unit sworn or unsworn reports regarding persons employed by the employing unit as necessary for the effective administration of this title."

Chapter 815.106 (g) of the Rules states:

"All records shall be kept and maintained as to establish clearly the correctness of all reports which the employing unit is required to file with the Agency and shall be readily accessible to authorized representatives of the Agency within the geographical boundaries of the State of Texas; and in the event the records are not maintained or are not available within Texas, the employing unit shall pay to the Agency the expenses and costs incurred when a representative of the Agency is required to go outside the State of Texas to inspect or audit the employing unit's records."

Section 301.071(a) of the TUCA states:

"In discharging duties imposed under this title, an appeal tribunal established under this title, an examiner or other hearings officer employed or appointed by the commission or the executive director, a member of the commission, or a representative authorized by the commission may:

  1. administer oaths;

  2. take depositions;

  3. certify to official acts; and

  4. issue subpoenas to compel the attendance of witnesses and the production of books, papers, correspondence, memoranda, and other records considered necessary as evidence in connection with a disputed claim or the administration of this title."

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Last Revision: May 05, 2011