ACCOUNTING FOR AUDIT ASSESSMENTS - 8286

As a result of audit examinations, persons or other entities are often assessed amounts to be paid or returned to the state. Some statutes and/or administrative procedures provide for a period during which the audit finding may be protested. After resolving protests or after the protest period expires, the audit assessment becomes final.

Agencies/departments will establish a contingent receivable on the date the audit assessment is ready for formal communication to the entity/individual assessed. Once the audit assessment becomes final, reverse the contingent receivable and record as a valid receivable for the final amount. If the assessed amount is an abatement or reimbursement receivable, follow the instructions in SAM sections 8287, 8288,10407, and 10408. Accrue revenue receivables per SAM section 8296, Year-End Procedures.