Top obstacles to smoother tax audits

A tax audit of a client’s small business can be frustrating for you — but it doesn’t have to be. Find out what tax practitioners can do to ease the process for everyone involved.

Despite recent efforts by the CRA and CPA Canada to bring a more collaborative spirit to small business tax audits, obstacles may arise that slow down the completion of the audit and prevent you from getting back to business. The main obstacles to a smooth small business audit are:
  • missing or incomplete books and records
  • supporting documents not available or not kept
  • account groupings not provided
  • no responses to audit queries
  • unreconciled accounts, particularly shareholder loans accounts
  • unavailable spousal information
  • delays imposed to planned start dates
With a cooperative and responsive approach to your clients’ audits, you can:
  • help shorten the time it takes for the auditor to reach conclusions
  • get certainty that CRA assessments take into account all the relevant facts
  • pre-empt any need to appeal inaccurate assessments that can prolong the tax administration process even further
By recognizing potential sources of delays and working with clients to avoid them, tax practitioners can help the CRA complete its audit work efficiently while ensuring your clients’ interests are best served.

Keep the conversation going

I want to hear from you. What are your ideas on how the CRA’s audit process could be improved? You can keep the conversation going by posting a comment below.

CPA Canada’s Tax Blog is designed to create an exchange of ideas on tax policy and practice issues and their impact on those who practise tax. Your comments can provide helpful input into the public interest advocacy positions developed by CPA Canada.

About the Author

Gabe Hayos, FCPA, FCA, ICD.D

Vice-president, Taxation, CPA Canada

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