Tips on how to deal with Audit
AN experienced assessee gave me the following tips on how to deal with Audit – Departmental or AG's.
1. They expect you to arrange a car to pick them up and bring them to your factory/office – ensure that the car reaches them as late as possible. Never allow them to hire the cab; you arrange it for them.
2. As soon as they arrive, receive them with all humility and show great respect to them.
3. Arrange for snacks, coffee/tea etc and indulge them in small talk.
4. Tell them that you are there to take care of all their needs – just ask and it will be provided.
5. Immediately after snacks and coffee, take them out for lunch at the farthest hotel and ensure that they take as much time as possible to finish the lunch. Take your own time in clearing the bill and ensure that the taxi driver is not available after the lunch. By this time it should be evening and you can tell the Auditors that they could start their work in earnest ‘from tomorrow'
6. ‘Tomorrow' and the next few days repeat the procedure in 1 to 5.
7. If they still find time to be in your factory, be very nice to them - if they ask for coffee, tea, newspapers, telephone, internet – be very prompt in providing these services.
8. If they ask for files, tell them politely and nicely that you will get them in a minute and don't appear before them for the next couple of hours. By that time it is pack up time for them.
9. Repeat 8 for the next few days, but do give them some unimportant files.
10. Always ensure that their ego is kept high - praise them for their wonderful observations and behave as if you are an idiot and you find them as super intelligent species. You behave as an idiot not because you are, but because they are!
11. For any issue they raise, ask them for their advice and express deep gratitude for the piece of wisdom.
12. After the Audit is over, present them with small packets containing the easily recognised pieces of paper with the Reserve Bank Governor's signature on them.
You may still get the Show Cause Notice from your Central Excise officer, but the damage will be less and you have to accept it as fact of life.