Inspecting every invoice? No. Inspecting large invoices? Yes. Inspecting large invoices not related to cost-of-sales? Yes. For one of our larger clients, their annual audit took 75% of the accountancy staff, in addition to the auditing staff, because every invoice over a certain threshold had to be looked at.
And if I’d seen an invoice for extensive renovations where some of the parts purchased looked questionable (like a solid gold toilet), I absolutely wouldn’t have taken that on faith as a genuine business expense that should be used to reduce profit, and would have questioned it. If there was a huge payment going out and no invoice to support it, I wouldn’t have taken it on faith that was a business expense. While it would have been up to my boss at the time whether it was included, it would have been negligent of me to see a massive invoice for something obviously excessive and not raise a query about its validity.
And yes, if there were questions about whether something large and excessive had genuinely been installed in the office rather than the business owner’s private home (and a gold toilet would invite questions like that), my boss would have asked to go and have a look before signing off on it being a business expense. And even then, if the gold toilet was in the business owner’s work office, it would likely still have been considered personal expenditure when it’s quite clearly excessive and quite clearly only for him personally. We have tax rules in this country that where a proportion of a business expense is determined to be personal in nature, it gets added back into the profit when the tax is calculated. While typically this is stuff like a business owner using the company van to run personal errands, or a farmer where part of the electricity and water use for the whole property applies to the living quarters (this is often estimated, like saying “5% of motor expenses, 10% of power and water, etc”, but the principle is that if a percentage is personal not business, then it’s not deductible for tax purposes), it would also apply to the inclusion of a gold toilet for personal use in an otherwise business-related office renovation.