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Home » Accounting Records » The Risk-Based Approach – Risky business for SMEs? – Part I

The Risk-Based Approach – Risky business for SMEs? – Part I

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HMRC (Photo credit: Images_of_Money)

The issue:

Risk-based approaches to manage Compliance Service delivery are undergoing a maturity model evolution.

This per se is not a negative issue, however, do risk-based approaches leave us exposed to more or less compliance risk?

We pose this question because a number of process advances, including technological drivers have over the past few years increased the incidence of the risk-based approach (r)evolution.

As an example, HMRC launched their risk based approach pilot scheme related to business record keeping called ‘Business Records Check‘ a few years ago (2011), only for the initiative to ‘go quiet’ and then suddenly to rear its head again late in 2013.

The facts:

From the HMRC web site, the following information was published:

Up until 17 February 2012, 3,431 BRC had been carried out. These found that 36 per cent of businesses had some issue with their record-keeping of which 10 per cent had issues serious enough to warrant a follow up visit.

By extrapolation, HMRC also publish within their background report the following table:

HMRC BRC Checks

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