Three Tier Audit System

The implementation of the Assess First Audit Later (AFAL) system enables the Department to focus on assessing complex cases and conducting post assessment desk audits, field audits and investigations.

Under the AFAL system, a customised computer-assisted case selection program has been devised. Depending on the facts of each case, cases selected will be allotted to the assessing officers to conduct “desk audit”, to the field auditors to conduct “field audit” or to the investigators to conduct an in-depth “investigation”. The audit trilogy has enhanced the effectiveness in identifying high-risk cases for audit and investigation, thereby minimising the risk of revenue leakage due to tax evasion and avoidance.

Reference:

• DEPARTMENTAL INTERPRETATION AND PRACTICE NOTES NO. 11 (REVISED) FIELD AUDIT AND INVESTIGATION, Inland Revenue Department, The Government of the Hong Kong Special Administrative Region of the People's Republic of China https://www.ird.gov.hk/eng/pdf/dipn11.pdf

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