Inspection is the action and effect of supervising . The verb indicates the control and criticism of someone's actions or works, or the fulfillment of the office of fiscal (the person who investigates and betrays the operations of others or the subject that represents and exercises the public ministry in court).
The inspection consists in examine an activity to see if it complies with current regulations . At private sector , the inspection can be decreed by the State (to check if a company complies with the law) or internally by the companies themselves (to control the balance sheets, the stock and destination of the goods, etc.).
For example: before a complaint against a company that supposedly does not deliver invoices for its sales, a state agency decides to initiate the inspection of the firm to verify that the payment of taxes is being fulfilled. If the analysis of its activity detects that the company effectively failed to deliver invoices, the State may act with some type of penalty. On the other hand, if the inspection shows that the company does comply with the law, the complaint is dismissed.
To corroborate that each taxpayer pays the amount of their taxes correctly and in full, the audit must be organized in a series of well-defined tasks, which are divided into groups. On the one hand, there are massive processes, those plans oriented to the analysis of the activities of a large number of people, for which computer networks and a structure based on effectiveness and efficiency are used.
These plans They are carried out at the national level and, therefore, study hundreds of thousands of cases monthly, looking for inconsistencies in the payments and tax returns of taxpayers. It is worth mentioning that today there is still a moderate percentage of people who submit their paper statements, which slows down the process.
Performing control over such a volume of activities differs substantially from the audit of a particular case; its greater complexity does not reside in quantity, but from it arises the need to complicate the processes to be able to complete them in less time. Therefore, instead of verifying the documents one by one, as would be possible when inspecting a store, advanced functions are used to help detect inconsistent data.
On the other hand, there are the selective processes, that is, plans that focus on well-defined activities or groups of taxpayers, generally for having failed to comply with their tax obligation in a very obvious way. It is a more flexible structure, since it varies according to the objective sought in each case; as expected, you can not do so many follow-ups of this type per year, since they lead to the physical displacement of the staff and their total Attention to each particular operation.
When illegal activities are detected through the inspection that generate income based on the evasion tax, proceed to pursue tax fraud, a plan that aims to reduce the financial and economic capacity of evaders to get their operations to cease, which harm their country economically and socially.
At public sector , the audit implies controlling the activities of the State to confirm that they comply with the principles of legality and efficiency. The contracts established by the administration public and the use of state assets are among the factors that are usually subject to inspection.
The audit function should not be left to government , since the control has to be carried out on the activities developed by it.