How do you audit a person?

How you audit a person depends on context, for IRS tax audits the process follows formal steps, while for business or compliance audits it is similar. For IRS, you start with notification by mail explaining what years and items are under examination and what documents are needed. Then you gather records such as income statements, receipts, bank statements, mileage logs, and proof for deductions. The auditor examines these documents, compares reported income to third party information like W-2s and 1099s, verifies deductions have legitimate business purpose, and may interview the taxpayer to understand operations. There are three types, correspondence audits by mail for simple issues, office audits at IRS office for more complex issues, and field audits at taxpayer's home or business for extensive business reviews. Auditors document findings, propose adjustments if they find underreporting, and explain taxpayer rights to appeal. For internal business audits of a person, you review performance, expense reports, and compliance with policies. In all audits you must remain objective, maintain confidentiality, collect sufficient evidence, and provide a report with findings and recommendations. Taxpayers should respond promptly, provide only requested information, and consider professional representation.