Blog posts tagged in business audit
As mentioned in part 1 of this blog series, business audits are conducted by the CRA to ensure small and medium-sized businesses comply with the tax laws and fulfill their tax obligations. This 2nd blog will focus on what information the auditor examines during a business audit and what can happen after. Let’s get started . . .
What does an auditor examine during a business audit? The auditor will examine books and records, documents and information including:
- Information available to the CRA such as tax returns, credit bureau searches or property database information; - Your business records such as...
Business Audits are done by the Canada Revenue Agency to promote compliance and help maintain public confidence in the fairness and integrity of our tax system.
During a business audit, the CRA examines books and records of small and medium-sized businesses to ensure that they are fulfilling their tax obligations and applying tax laws correctly.
If you have been selected for a business audit by the CRA, there are a number of things you should know going in.
First thing you should know when you have been selected for a business audit is that you should never go at it alone. ...
Yes, unfortunately, it is standard practice for the CRA to do audits of businesses to inspect GST/HST and income tax and benefit returns, excise taxes and duties and payroll records.
The CRA uses several methods in choosing returns to audit.
Computer-generated lists. Most returns are selected for audit review from computer-generated lists.
Audit projects. Sometimes, the CCRA tests the compliance of a particular group of taxpayers. If the test shows that there is significant non-compliance within the group, the audit may proceed on a local, regional or national basis.
Leads. There are instances where leads are used in choosing returns to...
I will be explaining the process that should take place here so you can tell a good audit from a bad one. The first thing a good auditor will do is try to understand your business. Simply put, if they don’t understand what you do and how you do it, how can they assess the validity of your revenues and expenses.
A good auditor will then review your records (Balance Sheet, Income Statement, Trial Balance, and General Ledger) to confirm that the numbers correspond to the tax return.TIP– Make sure you have done this before giving your records to the auditor....