A clear strategy
We work with you to develop a clear strategy for the audit before the CRA's questions arrive.
Why does the CRA conduct audits?
Facing a CRA audit can feel stressful and overwhelming, but you don't have to go through it alone. Our tax specialists provide complete support throughout the audit process.
Many clients come to us with two big questions: "How likely is it to be audited?" and "Why does the CRA conduct audits?" In reality, CRA audits happen in two main ways. Sometimes, businesses are chosen purely at random through statistical models. In other cases, returns are selected for a targeted review when certain risk factors, unusual activity, or inconsistencies raise red flags.
When a CRA audit takes place, the process involves a detailed review of your records to confirm whether you have reported your income correctly, claimed deductions and credits properly, and paid the correct amount of tax. The CRA also checks whether you have only received the benefits and refunds you are entitled to. To do this, auditors may examine a wide range of documents, including business ledgers, receipts, contracts, and bank records. They may also look at personal records such as mortgage statements or credit card transactions, and in some cases, third-party records from spouses, partners, family members, or corporations connected to you.
What happens at the end of a review
At the end of the review, the CRA will issue one of two outcomes.
- No changes
- Your return was accurate and no additional tax is owed.
- Reassessment
- You may be required to pay more tax — or in some cases, receive an additional refund.
- Your response window
- 30 days to accept the CRA's proposal or challenge it with additional evidence and explanations.
Situations that increase the likelihood of an audit
Certain situations tend to increase the likelihood of a CRA audit. The CRA also uses industry codes to benchmark profit margins, so results that differ greatly from industry standards may attract attention. Common triggers include:
- Sudden or unexplained income or expense changes
- Repeated business losses over multiple years
- Expense claims that are unusually high compared to others in the same industry
- Large charitable donations that don't align with reported income
- Missing T-slips such as T4s or T5s, which the CRA already has on file
- Shareholder loans not repaid within a year
- Overstated home office deductions
- Mismatches between HST returns and income tax filings
Experienced professionals protecting your interests
CRA communication
We handle communication with the CRA on your behalf, so nothing is missed or misstated.
Fair negotiation
We negotiate to ensure fair treatment while minimizing potential penalties.
Records in order
We review all documentation, prepare strong supporting evidence, and correct any errors in your records to bring everything into full compliance.
With ADYZER at your side, you can approach an audit with confidence, knowing that you have experienced professionals protecting your interests.