10 Things to Do When You're Getting Audited

You just got the call…you’re getting audited!!!

Now what?

Well, give yourself time to take some deep breaths because you’re probably in panic mode. 

Audits happen, they’re normal, and they’re just a way to make sure everything is as it should be.

The only people who genuinely should be sweating are the people doing the shady stuff, but for you, this is essentially just a check-up.

While it is tedious and frustrating, there are 10 key things that you can do to ensure you don’t feel like you’re losing control while being audited. So, let’s calm your nerves and go over the 10 things you need to do when you are getting audited.

Gather all your financial documents and records that are related to the audit.

Preparation is key for most things, and auditing is most definitely included. When you get notified of your audit, step one is to preemptively gather all the documents and information relevant to the audit. This will also save you and the auditor a bit of time and help the process go more smoothly.

Make sure you understand why the audit is taking place.

When you get audited it’s important to know what the trigger point was. Having the “why” will help you understand moving forward, it could be a simple mistake that you didn’t catch before filing (to err is human, remember?) or it could be simply routine. Whatever the reason or the causation, understanding the trigger point for the audit will help with your documentation gathering as well as seeking assistance or support from your accountant/tax attorney.

Stay organized and keep a record of all correspondence between yourself and the CRA.

Get the receipts. Seriously. Even if it’s a phone call, asking to have the information discussed in the call in writing for your records is good assurance. On the off chance you have conflicting information, it will help back up your claims on why you did X one way instead of another way. As well, your correspondence may also give you insight on the procedure for other areas of your finances, helping with tweaking or making corrections.

Respond to all notices, questions, and requests from the CRA on time.

The faster the response, the faster the process. No one wants to deal with a lengthy audit, no one, especially not the auditor. Quick responses and request fulfillment will help speed up the process, ensuring it doesn’t get dragged on for too long.

Don't provide information that has not been requested by the CRA.

Answer the question and only the question. Like insurance, answer the question they ask, giving additional information is not necessary and ultimately can make the answer ambiguous. 

Not only that but providing additional information that has not been requested could confuse the auditor or lengthen the process entirely, which either way is not fun.

Be truthful and provide accurate information.

Tell the truth. That’s it. If your information is not accurate or truthful, they will find out.

Ask questions if you need help understanding something.

This will help to make sure whatever the issue may have been that you are more aware moving forward. The more questions you ask, the more you will understand not only how the auditor views your financial documents but also what to know for a future potential audit and understand the process further.

Review all documents and calculations that are provided to you.

Even the CRA makes mistakes, remember, to err is human as I said earlier. That’s why reviewing the documents and the calculations provided to you by the auditor is important. At the end of the day, you just want your information to be accurate, making any corrections necessary to ensure that whatever the reasoning was for this audit is resolved.

Seek professional help if needed.

Sometimes extra support is necessary and will bring you more peace of mind. 

If you have questions but don’t need a full-time bookkeeper, learn about my Ask a Bookkeeper Clarity Sessions, a 60-minute session dedicated to answering your financial and business-related questions.

Follow the advice of your accountant or tax attorney.

You pay these experts for a reason, listen to them. You hired your accountant/tax attorney because you trust them, so why wouldn’t you trust their advice, the thing you quite literally pay them for?

The most important part of being audited is to be prepared. The stress of audits can be tamed by keeping your books organized and having an expert in your back pocket (just in case). 

Audits happen, don’t think of it as getting in trouble, think of it like a check-up for your finances. Although it can be a frustrating process, at its core, auditing is just about making sure nothing weird is going on and you’re in compliance. 

Did you read this and start worrying about your books? Learn about our Clean Up & Catch Up package to help you get organized!