• Better practice 5: better practice checklist

    An entity that has established effective mechanisms for the preparation and review of its FBT return will have implemented some or all of the better practices identified in the following checklist. The list is not intended to be prescriptive, as the measures taken by individual entities will depend on a number of factors including its operating environment and the nature of its FBT obligations.

    Entities that can answer 'Yes' to most of these questions are likely to have established effective mechanisms for preparing and reviewing their FBT return. If most of the answers are 'No', entities should consider whether there is an opportunity to review their existing FBT arrangements.

    Indicators of better practice

    Yes/No

    Are arrangements in place designed to capture all benefits?

     

    Are general ledger codes reviewed to determine whether all FBT items are captured?

     

    Are records maintained that support all FBT transactions?

     

    Are relevant declarations obtained before applying the otherwise deductible rule or other reductions in the taxable value of benefits?

     

    Is FBT return data compared to operational data to verify the accuracy of the FBT return data and is FBT data reconciled to general ledger code data?

    For example, is FBT data compared to fleet data that is used for operational purposes?

     

    Are there certifications for the preparation and review of the FBT return?

     

    Where an external party is engaged to assist with the preparation or review of the FBT return, does that party complete the required certifications so there is a clear record of the activities that party has undertaken?

     

    Are quarterly or mid-year data integrity reviews undertaken?

     

    Is a nominated individual or work area responsible for initiating and implementing review and improvement processes?

     

    Is a pre-lodgment review of the FBT return undertaken annually?

     

    Is a post-lodgment review of the FBT return undertaken annually?

     

    Have FBT risks been formally linked to controls and are these controls tested periodically?

     

    Is FBT administration considered as part of internal audit's work program?

     

    Is there a central contact person or work area responsible to address issues, including questions raised by employees?

     

    Is there a central issue log to record FBT issues?

     

      Last modified: 23 Jul 2015QC 18627