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In the context of auditing, taxation plays a critical role in evaluating an organization’s compliance with applicable tax laws and regulations. Auditors review tax-related documents, returns, and records to ensure that the taxes reported and paid by the entity are accurate and legally sound. This involves verifying income declarations, expense claims, tax deductions, and liabilities recorded in the financial statements. Auditors also assess whether the company has appropriately applied current tax laws, including direct and indirect taxes, and whether there are any risks of underpayment, overpayment, or potential tax penalties. A thorough tax audit not only strengthens transparency but also enhances the credibility of financial reporting, ensuring stakeholders that the organization is managing its tax obligations responsibly and ethically.

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