Mr. Niall Cody:

E-audits involve an interrogation of a feed of electronic records. As the committee is aware, most businesses of scale now keep electronic records. We use IDEA software which comprises a commercial e-audit package which is also used by the Comptroller and Auditor General. An e-audit does not take place solely in our office; it also involves an interview. The opening interview with the taxpayer and his or her agent, if applicable, and the opportunity to make disclosures and so on are a core part of the audit process. If one is a retailer with electronic records of purchases, sales and cash, we will download those records and apply our audit techniques and software to that process. An e-audit is not appropriate in cases such as those involving complex accounts. If the business in question is a multiple, e-audit may encounter difficulty regarding its VAT system and the proper rates being charged on products. The e-audit process allows us to carry out 100% analysis of the data as compared with traditional paper-based auditing which involves taking representative samples and extrapolating from them. We have engaged in e-audit to varying extents for 20 years. It has been introduced through various processes. Its usage is far more routine than was previously the case. Our annual report in a couple of years' time may not contain a paragraph explaining e-audit because we will use e-audit techniques for appropriate cases. It is becoming more the norm. The cases will tend to be bigger. It could have been noted in the paragraph in question that the audit yield was higher because e-audit tends to involve bigger cases.