The FBR will select cases for audit by random ballot. Cases will be selected for audit through Risk Based Audit Management System (RAMS). Once funding is approved, the FBR will then select third party auditors. The FBR tax can cover more than 50,000 income tax cases for third party audits of companies, AOPs and individuals for the year 2019.

Under the Income Tax Ordinance, 2001, the Board may appoint a firm of Chartered Accountants as defined under the Chartered Accountants Ordinance, 1961 or a firm of Cost and Management Accountants such as the Cost and Management Accountants Act, 1966.

It is stated that income tax matters of any person or class of persons, and the scope of such audit shall be decided by the Board or the Commissioner on a case by case basis.

It has also been decided that third party auditors will be required to adhere to the privacy rules to ensure the confidentiality of the data of the taxpayers selected for the audit. Under Section 216 (7) of the Income Tax Ordinance, 2001, confidentiality will be ensured on stamp papers by chartered accountant firms as stated under the Chartered Accountants Ordinance, 1961.

To ensure better, standardized and timely audit quality, third party auditors will be divided into three different categories according to the turnover declared in the taxpayers’ financial statements.