All the source documents exist, but there is no index tying them to the filed Form 5472. Is that still an audit problem?
Our file is not empty at all. In fact, it is almost the opposite problem: there is a large volume of supporting material, but nothing that clearly points from the filed numbers to the exact folders and workpapers behind them. That has already created friction with one preparer transition, and I suspect it would be even worse in a dispute.
I want to know whether a missing index is just an efficiency problem or whether it can actually become a compliance weakness if the business cannot show the path from reported amounts back to source support in a way an outsider can follow quickly.
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