Is this spreadsheet a tax evader? How HM Customs and Excise test spreadsheet applications

Spreadsheet models are commonly used by UK taxpayers to calculate their liabilities. The risk of error from spreadsheets has been exhaustively documented, and applications in this domain are no less at risk of error than those in any other. Officers of HM Customs and Excise in the UK have been performing field audits of taxpayers´ spreadsheet applications since 1985. Building on the experience gained, HM Customs and Excise computer auditors have developed a testing methodology and audit support software for use by generalised tax inspectors. This paper briefly summarises the audit experience, describes the methodology and outlines the results to date of a campaign of spreadsheet testing that started in July 1999.