What happens during an audit?
You will receive a letter from the CRA with the auditors name and phone number listed in the letter. The letter will describe what you are being audited for ( usually a specific tax claim, not your entire return ) and you will generally be given 30 days to provide the receipts and backup information for your claim. Sometimes the auditor will come and visit you – depending on the size of the materials for what you are claiming. Generally for an individual, you can drop it of or mail it in. You can ask for an extension if you need one and ask any questions from the auditor. The auditor will go through your receipts and your claim, and issue you a letter either stating there are no changes as a result of their audit ( best scenario for you ), or they will send a letter proposing changes to your return. You can then agree or disagree (informally) and provide more information if there was something the auditor didnt understand. There is room for negotiation. Then a final letter will be issu
( back to top ) Initial contact by the Audit Section If you are selected for audit, an auditor will contact you by telephone or letter. The auditor will arrange an interview, advise what records will be examined, and ask that these records be made available at the audit location. Audit Conclusion At the conclusion of an audit, you will be provided with the audit working papers. It may be determined that you are properly collecting, remitting, and paying the tax, or that a tax liability exists. The auditor will ask you to sign an Audit Report form, which states that the audit has been explained to you and that you understand the basis of any tax assessment. Signing the form does not mean that you cannot request an adjustment or appeal the assessment at a later date. After most audit assessments, the Revenue and Taxation Division sends a letter outlining the areas where the legislation was not correctly applied. The division also recommends that you investigate these areas and implement
Engagement Memo – With few exceptions, audit clients are notified in writing when their area is selected for review. These letters are sent to the vice president of the area being audited as well as to the appropriate dean, chairperson, or director. The engagement memo states the date, time, and place of the entrance conference and the objectives to be accomplished in the audit. Due to the nature of some audit work, we may give little or no advance notice. Entrance Conference – An entrance conference is scheduled with the head of the department to discuss the purpose and scope of the audit. We encourage audit clients to discuss any concerns or questions they may have about the audit. Audit clients may also request a review of those areas of most concern to them be included as part of the audit activity. Audit Work – Written policies and procedures may be requested to aid the auditor in understanding departmental operations; however, it is often necessary for auditors to reside in the d
Notification letter: This letter states the objectives of the audit, the start date and key audit staff. It is sent to the appropriate deputy commissioner and director. Auditees are normally notified in writing when their area is selected for an audit; however, due to the nature of some audit work, the office may give little or no notice. Entrance conference: Depending on the type of audit and amount of audit work planned, an entrance conference with the head of the department and/or executive staff may be held to discuss the purpose and scope of the audit. Audit work: Most audits involve two or three audit staff. Auditors review departmental records and interview department personnel. The department director or supervisor is responsible for ensuring that all pertinent data are made available. Auditors try to arrange meetings in advance and to work around scheduling conflicts. The duration of the audit will vary depending upon its scope; it could take anywhere from a week to several mo
