To this day, annual audits continue to serve as a perfect opportunity for FIE’s to double-check their tax obligations, identify unnecessary tax payments that can be refunded, and improve their accounting system. Though the annual audit report is generally not required to be submitted in current practice, it is by law a necessary requirement for all FIEs.
Beyond this, there are various other reasons for FIEs to undergo an audit annually. In some cases, an audit may be a necessary step or will enable the firm to be better equipped to complete a certain business transaction. In other situations, constant changes in the external environment deem an audit a prudent business decision. We discuss the most common considerations below.