Chapter 4:  Completing the Audit Forms and Schedules

Field Tax Accounts Examiners hired after July 1, 2000 must document their audit investigations and prepare audit work papers with the aid of appropriate computer software. If audit software other than TWC's PC audit program is used, the other software must produce report formats comparable to the reports produced by TWC's audit program.

Blank copies of audit forms are located in the Appendix Section of this manual.

Manual audits have the same work paper documentation requirements as computer audits except for the Detail Audit Summary reports printed by TWC’s PC audit program. Copies of required paper forms are located in the Appendix.

The completed paper audit package should be assembled as follows:

1. C-51 Field Audit Report.
   
   
2. Pre-Audit Letter (screen print requesting the letter, not required for audits submitted electronically).
   
   
3. C-102 Pre-Audit Questionnaire.
   
   
4. Post Audit Letter (screen print requesting the letter, not required for audits submitted electronically).
   
   
5. Schedule 1.
   
   
6. Schedule 1 Summary.
   
   
7. Schedule 2.
   
   
8. Schedule 3.
   
   
9. Detail Audit Summary Reports - The TWC PC audit program prints one report for each quarter with the exception of quarters having zero wages. Print all Detail Audit Summary Reports and include them in the audit work papers.
   
   
10. Copies of reports prepared as a result of the audit - Status Report, C-3's, C-4's, C-5's and C-7's, C-42, etc. Copies of all reports for quarters inside and outside the base period are required to be attached to the audit work papers. (Refer to the Field Tax Procedures Manual for guidance on submitting reports that are outside the base period or outside the statute of limitations.)
    
    
11. Other work papers, schedules, or documents to support audit conclusions.
    
    
12. Audit Review Form C-51C must be included with the audit work papers, if completed by the supervisor.

• Audits should be keyed into the system within two weeks after completion of the audit. Signing and dating the C-51 Field Audit Report indicates completion of the audit.
  
  
• If the audit program truncates an item such as Employer name, Type of Business, Nature of Business, etc., on any form, report or schedule, this is due to space limitations. The auditor is not required to complete (write in) the full entry.
  
  
• If an audit notification letter is dated during the last quarter of the year, and the audit is not needed to meet an audit quota, the audit may be signed, dated, and keyed during January of the next year.
  
  
• A Status Report is a REQUIRED document for audits of corporations (includes LLC) or an entity that has a change in their status, or officer/ownership information.
  
  
• Expanded audits require separate schedules for each audited year.
  
  
• Copies of documents used during the audit which support the audit results should be included in the audit work papers. These include but are not limited to a chart of accounts, vendor invoices, 1099's, W-2's, copies of time cards, newspaper ads, business cards, printouts from Internet sites, etc. Copies of supporting documents for audits submitted electronically will be scanned via EInput under the label "Audit Documentation or TWC Correspondence".