Guidelines for Post-Clearance Audit (PCA) - Implementation Steps
GUIDELINES FOR
POST-CLEARANCE AUDIT
(PCA)
VOLUME 2
WORLD CUSTOMS ORGANIZATION
1
IMPLEMENTATION OF PCA
The PCA process as outlined in these guidelines
consists of the following steps:
1.
Development of audit programs and standardized
audit procedures
2.
Identification of potential subjects for audit
3.
Selection process
4.
Planning the audit
5.
Conduct of the field audit
6.
Conclusion of the audit/Reporting
7.
Evaluation and follow-up
2
Selection process (I)
3
Profile of importers / Trade data
e.g.
Company structure
Business partners (suppliers, agents, customers etc.)
Method of payment, etc.
Volume of importations
Amount of duties paid
Country of Origin of imported goods
Ports of loading
Selection process (II)
4
Past records of the auditee
e.g.
Audit records
Customs entry errors
Offence records
Tax, VAT compliance information, if available
Related information/Intelligence
Pre-audit research
5
Pre-audit research is a preliminary examination
which serves two main purposes:
to focus on specific risk areas of an auditee's systems
and import declarations, through analysis of available
data; and
to draft an audit plan that includes the audit objectives,
scope, methodologies and assignment of auditor/team
members.
Notification of audit
6
The auditee should be advised of the following:
The general procedure for the visit and its objectives
Details of the documentation to be made available
(specifying the period to be examined, if known)
Names of personnel who will carry out the audit
Facilities to be made available for the auditor/s (e.g.
adequate working area)
Conduct Of The Field Audit
7
Basic guidelines
8
Foster a cooperative relationship
Auditors should positively guide the auditee regarding
declaration errors caused by a lack of understanding
of laws and regulations
Auditors must refrain from revealing their provisional
impressions to the auditee during the course of the audit
Maintain a professional and courteous attitude towards
the auditee
Verification of the Customs value
9
Price negotiations and discounts
Terms of Sale
Payment terms
Additional terms
Separate payments
Evaluation and follow-up
10
Customs administrations should develop a mechanism
to assess and evaluate the success of the PCA
program. This may include:
An improvement of compliance levels
Additional revenue collected
Number of investigation referrals
Cost/benefit analysis
Irregularities etc.
11
Irregularity
means the breach of laws and
regulations, regardless of its cause, such as deliberate
intention (fraud), negligence, or simple mistake (error)
Fraud
means the wilful intent of a taxpayer to evade
a tax
Negligence
means a lack of due care or failure to do
what a reasonable and ordinarily prudent person
would do under the given circumstances
Error
means a mistake in a Customs declaration.
Understanding the steps involved in the implementation of Post-Clearance Audit (PCA) is crucial for effective customs procedures. This guide outlines the process, from developing audit programs to conducting field audits and reporting. Selection processes, pre-audit research, and notification procedures are highlighted, emphasizing the importance of thorough examination and cooperative relationships. Follow these guidelines to enhance compliance and minimize errors in import declarations.
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Presentation Transcript
1 GUIDELINES FOR POST-CLEARANCE AUDIT (PCA) VOLUME 2 WORLD CUSTOMS ORGANIZATION
IMPLEMENTATION OF PCA 2 The PCA process as outlined in these guidelines consists of the following steps: Development of audit programs and standardized audit procedures Identification of potential subjects for audit Selection process Planning the audit Conduct of the field audit Conclusion of the audit/Reporting Evaluation and follow-up 1. 2. 3. 4. 5. 6. 7.
Selection process (I) 3 Profile of importers / Trade data e.g. Company structure Business partners (suppliers, agents, customers etc.) Method of payment, etc. Volume of importations Amount of duties paid Country of Origin of imported goods Ports of loading
Selection process (II) 4 Past records of the auditee e.g. Audit records Customs entry errors Offence records Tax, VAT compliance information, if available Related information/Intelligence
Pre-audit research 5 Pre-audit research is a preliminary examination which serves two main purposes: to focus on specific risk areas of an auditee's systems and import declarations, through analysis of available data; and to draft an audit plan that includes the audit objectives, scope, methodologies and assignment of auditor/team members.
Notification of audit 6 The auditee should be advised of the following: The general procedure for the visit and its objectives Details of the documentation to be made available (specifying the period to be examined, if known) Names of personnel who will carry out the audit Facilities to be made available for the auditor/s (e.g. adequate working area)
Conduct Of The Field Audit 7 Third-party Physical inspection/control audit (if necessary) (if necessary)
Basic guidelines 8 Foster a cooperative relationship Auditors should positively guide the auditee regarding declaration errors caused by a lack of understanding of laws and regulations Auditors must refrain from revealing their provisional impressions to the auditee during the course of the audit Maintain a professional and courteous attitude towards the auditee
Verification of the Customs value 9 Price negotiations and discounts Terms of Sale Payment terms Additional terms Separate payments
Evaluation and follow-up 10 Customs administrations should develop a mechanism to assess and evaluate the success of the PCA program. This may include: An improvement of compliance levels Additional revenue collected Number of investigation referrals Cost/benefit analysis
Irregularities etc. 11 Irregularity means the breach of laws and regulations, regardless of its cause, such as deliberate intention (fraud), negligence, or simple mistake (error) Fraud means the wilful intent of a taxpayer to evade a tax Negligence means a lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the given circumstances Error means a mistake in a Customs declaration.
