Tax audits are Canada Revenue Agency’s (CRA) way of ensuring that your tax return accurately represents the taxes you owe the government. There are two levels of severity when it comes to tax audits that a Canadian enterprise may face. One is a desk audit, which is when Canada Revenue Agency simply wants to look into one component of a tax return that may appear to be questionable. The other is a full-blown audit. The latter can be extremely stressful and taxing on an enterprise and its team.
In all cases, it is best to avoid any type of invasive financial audit. They are time-consuming and they often lead to spending money that your business did not account for. Therefore, our seasoned Canadian accounting team has created a list that will teach you how to avoid a tax audit.