CRA audits & financial reviews: what to expect
Whether you received a CRA audit notification or want to be prepared before one arrives, these guides walk through every type of Canadian audit — from a simple correspondence review to a full field audit, voluntary disclosure, tax court appeal, and beyond.
Choose your audit type
CRA Personal Audit
Understand what triggers a personal income tax audit, the full timeline from notification to reassessment, your taxpayer rights, and what documents to have ready.
CRA Business Audit
Desk, field, and correspondence audits for sole proprietors and corporations. Learn what CRA auditors can demand, document retention rules, and when to get representation.
GST/HST Audit
GST/HST audits run separately from income tax reviews. Common issues include incorrectly claimed input tax credits, exempt vs. taxable supply classification, and missing records.
Voluntary Disclosure Program
Proactively correct unreported income, missed filings, or undisclosed offshore accounts before CRA discovers them. Reduce or eliminate penalties with the VDP.
Tax Objections & Appeals
Disagree with a CRA assessment? File a Notice of Objection within 90 days. Learn the CRA review process, Tax Court of Canada options, and when to settle vs. fight.
Financial Statement Audit
Who needs a financial statement audit in Canada, Canadian Auditing Standards (CAS), ASPE vs. IFRS, the audit process phases, and types of auditor reports.
SOC Reports
SOC 1, SOC 2, and SOC 3 reports for service organizations. The Canadian equivalent CSAE 3416, Trust Services Criteria, Type 1 vs. Type 2, and typical costs.
Forensic Accounting
Fraud investigations, litigation support, hidden asset discovery in divorce proceedings, embezzlement, and insurance fraud. How courts use forensic accounting evidence.
3 most common audit triggers
CRA uses automated screening to select returns for review. These patterns consistently raise red flags.
Unusually high deductions
Home office claims, large vehicle or meal expenses, and rental losses that are disproportionate to income flag returns for review.
Unreported income
CRA cross-references T-slips, third-party data, and bank records. Income that appears on a T4 or T5 but not on your return triggers an immediate match error.
Cash-intensive businesses
Restaurants, tradespeople, and other cash-heavy industries face heightened audit risk because revenue can be under-reported without a clear paper trail.
Facing an audit? Get professional help.
A CPA or tax lawyer who handles CRA audits can represent you, communicate with auditors on your behalf, and protect your rights throughout the process.
Find a CPA who handles audits