Establishing Scope and Depth of the Audit
IRS IRC § 42 Audit Technique Guide — Part I (Introduction and Pre-Contact Analysis) · 2026 edition · updated 2026-07-29 · United States
The taxpayer's internal controls should be evaluated to determine the accuracy and reliability of the taxpayer's books and records. Based on that determination:
Establish the scope of the audit; i.e., identify issues requiring further examination and eliminate issues with little risk of material misstatement.
Establish the depth of the audit; i.e., select appropriate method for the examination of IRC §42 issues and determine the extent to which they should be used.
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