1. An agent obtaining this information before the initial appointment will be able to accomplish twoobjectives. a. First, the agent will be able to reconcile the trial balance to the tax return.b. Second, the agent will be able to ask more pointed questions during the initial interview.
Regarding the settlement, it is recommended the agent do a full reconciliation of the trial balance andthe adjusting journal entries to the tax go back. By doing a little work up front the agent should have aspecific understanding of the underlying transactions that make up the comeback. This is elaboratedfurther in the next part. Often in a dealership test, the liability accounts have special meaning. If thedealership is thinly capitalized, there may be a subject.. The recommended reconciliation will enable theagent to analyze liability accounts to determine if any issues exist regarding loans or inter-companyreassignment. When the initial interview is in custody, the agents' questioning may be more specificregarding liabilities or any transaction analysis made possible through the reconciliation.
Tax Classification Work papers (Tax Accountant’s/Preparer’s Grouping Sheets)
The agent has requested the tax classification work ID. It is difficult to envision a return at the level of anew vehicle dealership to be prepared without the assistance of such work identification. Whenestablished, most of the reconciliation is completed and the agent has saved the up front timepreviously scheduled.
Regarding the initial meeting, the objective is to acquire up-front information about the dealership'snormal operations and dealings with all other entities, shareholders and patrons. Usually, the best wayto do this was to require that the majority shareholder be present at the meeting. However, theshareholder may not be available during the time frame designated by the agent to begin theexamination.