As you likely already know, there are a lot of different steps and procedures that go into a CRA audit.
There are many things to be aware of should you receive a letter from CRA announcing an audit of your business, but the most important thing you should do is request the services of a company specializing in Canadian small business taxes.
Audits Can Occur Anywhere
If the CRA selects you for an audit they may complete the process from their own building, or they may need to come to your own location to parse through all of your documents and information.
So, CRA audits can occur anywhere - and they can also happen to anyone. The CRA has numerous different divisions selecting individuals and businesses for audits, and in some cases the selection is entirely random. So be aware that there's nothing you can do to make your business totally "audit-proof."
All of Your Documents Will Be Called Up
The CRA can call on you to produce documents that are up to 7 years old during the course of an audit.
So you need to make sure that every financial record - every receipt, even - is on hand in your office when it comes time for the CRA auditor to do their job.
If it's not, then the penalties will come crashing down on your business - whether further irregularities are found or not.
You May Even Need to Provide Aid to the Auditor
During the course of the audit, the person performing the process on behalf of the CRA may need to ask you some questions.
This is another thing that goes into the CRA's step-by-step audit system:
- If they ask you questions, you need to answer them.
- If they ask you to produce particular documents, you need to find and present them.
Luckily, this part of the process brings with it some benefits. Because you'll be in close contact with the auditor throughout the entirety of the audit itself, they’ll be sure to keep you updated of any irregularities or issues that may come up during their investigation.
Audit Protection Can Help to Ensure You End Up In Full Compliance
As you can see, the answer to "what goes into a CRA audit?" is "a lot."
So if you want to make sure your business will be protected throughout the process, employ the help of an audit representation firm as soon as possible.
A small business can expect to spend 5 to 10 days to comply with a CRA audit.
This is why all businesses should consider employing the help of accounting and tax services firms year round. If you have a team on your side, then they will stand by you in the case of an audit by offering audit protection.
FBC can help to ensure that you’re fully in compliance with the tax laws set down by the CRA. We can help you to make sure that you understand all of your company's financial history, so that no problems can come up between you and your auditor.
And if you are selected for an audit, as an FBC Member you can rest easy. Our service guarantee includes Audit Protection so you're covered in case of an audit.
If an FBC Member is ever audited by the CRA, we'll represent them at no extra cost.
So while there are other ways of preparing for this particularly stressful process, none of them are as sure as employing small business tax specialists to protect you.
It’s never a good time for a CRA audit. Book an appointment with FBC Now!