audit

What’s Your Chance of Being Audited?

The IRS has updated its audit guidelines, including the section on audit selection. It simplifies, or tries to simplify, the answer to one of life’s greatest mysteries - what are the chances of you being selected for a tax audit?

There are no doubt triggers such as outsize or oddball deductions that are well above the average for your tax bracket.

However, returns may still be selected for audits even if there’s no such red herring or error. You could end up being audited due to any of the following:-

-          Lousy Luck - The system randomly picks returns based on a statistical formula which has nothing to do with what’s in the returns.

-          Document Matching – If the information you report doesn’t match what’s on payor forms such Form W2 or Form 1099.

-          Business Partners – If your business partners of investors with whom you have extensive transactions have been selected for an audit, then you may be roped in for one too.

So let’s say you have done everything by the book and there’s nothing wrong with your returns, but there’s still a chance that you could be audited. What do the statistics say about this?

Well, depends on the adjusted gross income you show. According to an analysis published by Nolo.com, the lowest chance (0.73%) of being audited is in the $25,000 to $50,000 range.

It’s still at or below 1% for the expanded range of $25,000 to $200,000. It goes up to varying degrees as your income exceeds or falls below this range.

For example, if you show some income less than $25,000, there’s a 1.22% chance that you could be audited. If you show no income whatsoever, it’s all pain and no gain because your chances of being audited actually goes up to 3.42%.

At the other end, it really starts climbing after $5 million. For those with incomes in between $200,000 to $500,000, the chances of being audited are still only 2.66%.

It’s 5.32% up to $1 million and goes up marginally to 5.38% for those with incomes between $1-5 million.

For those with incomes in between $5 to $10 million, there’s a one in 20 chance that you’ll be picked for an audit from among this group.

For those whose incomes exceed $10 million, the chances of an audit go up to one in three.

Photo credit – house.gov

Audit reveals Pentagon credit cards used for gambling, hookers

If you’re looking to hide some spending habits — especially if those habits include gambling and escort services — it’s probably a good idea to use a credit card that your spouse doesn’t have access too.

But it’s definitely a bad idea to use a credit card issued by the Department of Defense.

An audit of “Government Travel Charge Transactions” from the DOD’s Office of Inspector General completely debunks the “what happens in Vegas stays in Vegas” slogan.

It revealed a significant number of Pentagon employees were charging their extracurricular activities in Las Vegas and Atlantic City, according to Politico.

A Pentagon official briefed on some of the findings stressed that the federal government did not necessarily pay the charges; holders of the cards pay their own bills and then submit receipts to be reimbursed for expenses related to their government business.

The official said that the employees may have used the government cards for gambling and escort services in order to shield the charges from spouses.

This wasn’t an official investigation, merely an audit of the credit card system. As a result the most likely result in employees being reminded that using a government credit card for these purposes — even if they end up paying for it out of their own pocket — violates policy.

It’s not the first time government employees have been caught with their pants down.

In March, a watchdog report revealed that Drug Enforcement Agency agents had “sex parties” with hookers hired by Colombian drug cartels.

cbc.ca
Revenue Canada targets birdwatchers for political activity

A small group of nature lovers in Kitchener-Waterloo Region in southern Ontario enjoy spending weekends watching birds and other wildlife, but lately they’re the ones under watch — by the Canada Revenue Agency.

[…]

Earlier this year, tax auditors sent a letter to the 300-member group, warning about political material on the group’s website.

The stern missive says the group must take appropriate action as necessary “including refraining from undertaking any partisan activities," with the ominous warning that "this letter does not preclude any future audits.”

[…]

The group, with annual revenues of just $16,000, has also had a guest speaker to talk about the oilsands, and has publicly defended the Endangered Species Act from being watered down.

All this audit is saying to me is

  • Fuck moving out
  • Fuck having a family
  • Fuck going to uni
  • Fuck being on a minimum wage (capped index at CPI MINUS 1% per year; ie making everything even more unaffordable)
  • Fuck being disabled even if you have a modest house
  • Fuck paying uni fees back (oh yeah, that’s a nice little sneaky one, moving it from CPI to whatever the loan is set at, close to 7-8% in all likelihood)
  • Fuck wanting to do science or working within the CSIRO
  • Fuck being indigenous
  • Fuck being given grants

Seriously though, does anyone other than big business win? 

Rand Paul Files Bill He Claims Will Audit Fed - Instead Makes Congress Able To Crash Economy

Rand Paul Files Bill He Claims Will Audit Fed – Instead Makes Congress Able To Crash Economy

If you listened to the right-wing blogosphere, Rand Paul’s new bill, S.294 was the end-all be-all of government actions this past week. The Ron Paul fans must be absolutely salivating at the call to audit the fed.

Of course the problem is that the Federal Reserve is audited on a regular basisby an independent, outside firm, with the audits verified by Congress. Which means, since the Federal…

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"Audit the Pentagon Act of 2014" - the only federal agency that has never been audited. It's Time.

GOP loves to hammer on fraud and waste in government, yet it seems the Pentagon is the only federal agency that never is audited. Of course it takes a progressive like Barbara Lee (Oakland, CA) to call for legislation “Audit the Pentagon Act of 2014” – I say we all should help her out and get this petition circulating.

Fociakadémiai audit: a nyilvánosság „nem szolgálja, ugyanakkor feltételezhetően negatívan befolyásolná a projekt sikerét”

Közérdekű adatként kértük, de nem kaptuk meg az MLSZ által a labdarúgó-akadémiák szakmai működéséről készítetett auditjelentést. Közpénz és közfeladatok vs. üzleti titkok és egy szakmai audit, amit valamiért veszélyeztetne, hogyha kiderülne, hogy milyen hiányosságokat tárt fel. Megkaptuk – és most közzé is tesszük – viszont azt az összefoglalót (PDF), amelyben a jelentést készítő tanácsadó cég mutatja be az audit részletes, de az egyes akadémiákra vonatkozó adatokat nem tartalmazó megállapításait.

"I need a plunger to my room, the toilet's clogged with tissue. It uhh....it was like this when I got in here, wouldn't housekeeping flush it or something?"

Yeah. I’m sure that your toilet has been clogged since you got here considering you checked in two days ago.
(Where have you been going this whole time?)
And I’m even more positive that while scrubbing that toilet clean, housekeeping just so happened to overlook it being stuffed with tissue and filled to the brim.

Just tell me you need a plunger and go on with your life. Idgaf if you clogged it or not.

New Post has been published on Business Intelligence Info

New Post has been published on http://www.businessintelligenceinfo.com/business-intelligence/big-data/hadoop-for-audit

Hadoop for Audit

Somewhere in windowless unglamorous temp space reserved for auditors, there should have been quiet celebration. Syncsort had just announced Ironstream, its tool to move massive mainframe log files to Splunk. It was now possible to ingest SMF, Log4J, SYSLOGs and other mainframe high-volume records into Splunk Enterprise. Even without Splunk, organizations already had the option of using Syncsort DMX-h, an ETL tool to ingest high volume audit and ops data into Hadoop.

But many fear the Big Data story has yet to reach those sequestered cubicles.

Big Data for audit may represent a broad step forward in GRC.

Big Four Big Data

It’s no accident that professional services firms originally engaged only for audit duties – such as for tax or public accounting functions – expanded into other services within customer organizations. A rich history of series of mergers and acquisitions has left four very large multinational firms which are responsible for auditing almost all publicly traded companies, and many private ones, too. Taken together, these four firms — Deloitte, PwC (PricewaterhouseCoopers), EY (Ernst & Young) and KPMG — account for almost three quarters of a million professionals worldwide.

The work of these many thousand professionals is usually distilled to one image, one single activity – the financial audit. A goal of financial audits is to assess the validity and reliability of information provided by a company. In addition, auditors are responsible for studying a company’s internal controls. Of course, if one reads the fine print, it is worth noting that audit findings are only as valid as the evidence provided by the company and the systems used to manage that evidence.

Outside of public accounting circles, the other work performed by audit firms is less well understood, but is at least as important as financial auditing. The realm of Governance, Regulation and Compliance (GRC) is one where Big Data can change what goes on in those windowless offices.

GRC Agility

For well-understood regulations like Sarbannes-Oxley, guidelines from the Public Company Accounting Oversight Board, and PCI Security Standards (“PCIDSS”), GRC has many dimensions.

Governance can include adherence to accounting standards across multi-national operations. Compliance can involve adherence to national and local taxation, employment and reporting. Regulation can involve industry-specific reporting that is mandated by national, state or local agencies, or mandated by court orders as a result of civil actions.

The audit challenge grows in direct proportion to the use of Big Data for transactional data in ecommerce. The recently described American Express Big Sync Platform was once separate data warehouses based on relational databases. Big Sync is now a single Big Data system that includes a recommender system to “make deals on the fly that merchants want consumers to take advantage of.” Big Sync is big. It consists of 17 server nodes, has around 300 cores and stores almost 1 petabyte of data per rack. Suppose the audit task is to judge the validity of revenue the company attributes to Big Sync-initiated transactions. Auditors might, at the least, need to sample transactions from Big Sync. To do so, they might need access to Big Sync’s Apache Solr, an enterprise search tool used in Big Sync, or perhaps hook Big Sync to Tableau or QlikView for data visualization.

Sleuth vs. Sleuth

Some facets of audit involve discovering anomalies, searching for patterns in logs. While the use of Hadoop and similar tools for network security is much discussed (e.g., recent startup VArmour ), Big Data auditors are likely to look beyond the increasingly well-understood area of cybersecurity to areas closer to home.

For example, in 2011 J. Perols identified financial statement fraud detection as a useful application of statistical and machine learning models. This approach can be extended using tools like Apache Mahout to operate on data stored in Hadoop or other Big Data repositories.

Despite considerable training within the Big Four in tools like Tableau and Splunk, audit professionals will typically need to partner with information technologists to further customer Big Data audit projects for customers. The key takeaway for auditors is this: Hadoop and other unstructured data repositories represent a cost-efficient way to collect data now – on a Big Data scale. This data can be subjected to immediate machine learning systems, or collected for later analysis.

One example of the trend is evident in the Financial Industry Regulatory Authority (Finra) proposal to run the SEC Consolidated Audit Trail , which is designed to help regulate markets in the world of high-frequency trading. The proposed platform incorporates Hadoop, Amazon Web Services, Hortonworks and Cloudera components to enable Big Data analytics to support market surveillance.

Such tools may well be needed to stay one step ahead of the misdeeds of bad actors. Some of the bad actors may well be insiders like Jérôme Kerviel, responsible for a $ 7B loss at the French Bank Société Générale. Otherwise audit firms could lose audit business to competitors – as well as to forensics specialists.

Reference

Johan Perols (2011) Financial Statement Fraud Detection: An Analysis of Statistical and Machine Learning Algorithms. AUDITING: A Journal of Practice & Theory: May 2011, Vol. 30, No. 2, pp. 19-50. http://dx.doi.org/10.2308/ajpt-50009

Photo Credit: Ravi via Flickr

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Syncsort blog

Rarely do I have a work week as incredibly hectic as this! I usually have this audit business down, but this week was different. New auditors, new layout, and a LOT of disorganization on the part of some…who shall remain nameless. It’s been a crazy one and I’m SO ready for Friday to be here so I can get some actual work done!

Good thing next week is equally crazy in BOTH work and home life! Oy!

What Hockey and Corman did today was try to scare us with a number of things they won’t enact, or won’t get through the Senate and be discarded. What they did was cast not just the Abbott government but the Baird, Newman, Napthine and Giles governments and the Liberal Party, into outer darkness, perhaps, forever.

Because they thought they had enough respect, enough stature, enough mana in the wider community, the nation, the world, to dare this nonsense, and they didn’t. They already seemed, after the single aberrant knight (there will never be another), and the search in the wrong ocean for the vanished plane, and the twenty-four billion dollar fighter-bomber that can’t win any imaginable war on any planet we might be on soon, a little crazy. And to make war, after that, on on every ingredient of Australia, and Australia itself (the Federation was broken, they said, and that means Australia was broken) was, on the face of it, barking mad.

Where did they get the idea that we as a nation were so keen to get back into surplus that we’d give up our child’s education, and our mother’s comfort in old age? Who told them we were like that?