Support during business inspections
An inspection starts without warning: an order arrives, or the inspector is already at the door. At that moment a company usually has two problems. First, nobody knows what the inspector is actually entitled to look at. Second, the documents sit in three different places and part of them are still being located while the inspection runs. We support businesses through those days: we check the grounds, prepare the documents, attend the inspection and then work on the report.
The lawyers and auditors at MK Audit have worked together since 2000. For an inspection that matters in practice: the tax inspector talks about accounting, and the person answering should understand the accounting, not only the procedure.
Which inspections we cover
| Authority | What they usually look at | What we do |
|---|---|---|
| State Tax Service | Scheduled and unscheduled documentary audits, factual checks: corporate income tax, VAT, payroll taxes, transactions with non-residents | Check the grounds and paperwork, prepare requested documents, attend the inspection, draft objections to the report |
| State Labour Service | Employment paperwork, contracts, orders, timesheets, payroll, military registration | HR records audit before the inspector arrives, explanations during the visit, work on the order issued |
| Other regulators | Licence conditions, permits, sector requirements | Review of grounds, drafting replies to requests, representation |
| Donor or grantor | Use of funds, project budget, supporting documents | Preparing the project file, explaining variances, attending the donor review |
Before the inspection
If you learn about the inspection in advance, there is time to do the important part.
- check the grounds: whether the order exists, whether the subject and period are correctly defined, whether the notice period was observed;
- assess what the inspector may require on those grounds and what falls outside the stated subject;
- collect the documents for the period and prepare an inventory, so they are handed over against signature rather than one by one from different offices;
- review the usual risk areas: contracts with features of risky transactions, undeclared wages, employment paperwork, costs without documents;
- brief one responsible person: who speaks to the inspector, who signs, who stays quiet.
During the inspection
An inspection begins with the inspector presenting an assignment, the order and an official ID. If those are defective, the taxpayer has the right to refuse admission, and that right has to be exercised correctly, otherwise it works against the company.
- we record who arrived and on what grounds, and reconcile the assignment with the order;
- we accept document requests in writing and reply in writing, with an inventory of what was handed over;
- we attend when employees give explanations, so that an accountant’s verbal answer does not become evidence against the company;
- we keep our own timeline of the inspection: what was asked, what was given, when.
After the inspection: the report
An inspection report is not yet an assessment, it is the authority’s position and it can be challenged. Objections are due within ten working days of receipt, so the review is better started on the day the report arrives.
Objections, appeals against tax notice-decisions and litigation are a separate practice, covered in detail here: tax audit support and tax disputes.
Why a lawyer and an auditor together
Most assessments come not from legal constructions but from the accounting records: the wrong period, a missing source document, a cost unrelated to the business, payroll allocated without a basis. A lawyer without an auditor sees the procedure but not where the figure in the report came from. An auditor without a lawyer sees the figure but not how to frame objections so that they hold. So we attend an inspection as a pair.
If the inspection shows the real problem is the state of the records, that is separate work: accounting restoration or a tax audit before the next inspection.
How to start
Tell us which authority is inspecting, for which period, and what you already have in hand: the order, the assignment, a document request or the report. We come back the same day, because inspection deadlines run in days. A commercial proposal follows once we have reviewed the situation.
The inspection has already started, is it too late to bring you in?
No. We join at any stage: during the inspection, after the report, after a tax notice-decision. The earlier the better, but there is plenty to do at the report stage too.
Do you attend in person or advise remotely?
In Kyiv and the region we attend on site. Elsewhere in Ukraine we work remotely: reviewing documents, preparing replies and objections, and travelling when needed.
Can inspectors be refused admission?
The right exists, but only on specific grounds: no assignment, order or official ID presented, or defects in them. That decision is taken on the spot and has to be recorded correctly, otherwise the consequences are worse than the inspection itself.
How long is there to object to the report?
Ten working days from receipt. That is short, so the review of the report is better started on the day it arrives rather than at the end of the period.
Do you handle donor reviews?
Yes. A donor review of a grant project is a separate format: they look at the budget, the supporting documents and the procurement procedures. We prepare the project file and attend the review.