Somebody Answers the CRA, and It Is Not You
An audit is not an accusation, and most of what owners call an audit is actually a review, which is narrower. What arrives is a letter naming a period, a program, and a list of things the CRA would like to see. It is a documentation exercise with a deadline. It feels like a verdict because of the letterhead.
We take the correspondence from there. That means reading what has genuinely been asked rather than what it feels like it says, pulling the records, preparing the response, dealing with the officer once we are authorised on your account, and carrying any adjustment into your books. Where the outcome changes a filed position it flows through to your T2 corporate tax preparation too, so the file and the return do not tell different stories.
The first thirty days decide how the rest of it goes
The instinct on opening the envelope is to reply immediately and explain everything. It is the wrong instinct. An unprompted account of your business model in answer to a question about vehicle expenses is how a narrow review becomes a broad one.
The deadline is real, so none of this means ignoring it. It means answering the question that was asked, in writing, with the documents that support it and nothing else attached. If more time is needed, an extension requested before the date is routine and one requested after it is not. Owners rarely get into trouble for the contents of their answer. They get into trouble for its timing and its scope.
What they ask for is what a busy business cannot rebuild later
Consider the volume behind a Vancouver restaurant or an independent retailer, sectors dominated by small incorporated operators running payroll and handling GST and PST on thousands of small transactions a month. When a reviewer asks for the support behind a sample of them, there is no realistic way to reconstruct it afterwards. Either the receipt was captured when it happened or it is gone.
That is the whole argument for keeping documents attached to transactions as they are entered. For a client on monthly work, a request like this is a retrieval job. For a business that has been meaning to organise its receipts it is a crisis, and the difference was decided months before the letter arrived.
Your books get corrected afterwards, not just the return
The part that quietly gets skipped is the cleanup. A review concludes, an adjustment is agreed, everyone exhales, and the records still contain the original treatment. Twelve months later the same error is in the file, still being repeated, and now it has a documented history the CRA knows about.
We close the loop. Whatever was reassessed gets posted properly and the treatment that caused it gets changed going forward. If the cause was structural, such as an expense category that was never right or a contractor relationship that does not hold up, that gets fixed at the source. Getting through a review is worth little if the next one finds the same thing.
If the years under review were never properly closed
Sometimes the honest answer is that the records for the period do not exist in a state anybody can defend. The accounts were never reconciled, the categorisation was guesswork, and there is no trail behind the numbers that were filed.
That is not rare, and it is still fixable, but the order matters. The books for those periods get rebuilt first through catch-up bookkeeping, so the response we send is supported by reconciled records rather than the same estimates that attracted attention. It takes longer than a straightforward reply and it is the only route that ends with the matter genuinely closed.
CRA Audit Support FAQs
Yes. It is one of the more common ways businesses reach us. The first thing we do is read what has actually been requested, because the scope of a letter and how an owner reads a letter are often two different things. Then we tell you honestly what state your records are in and what answering it properly is going to involve.
Bank statements for the period, a sales listing, and the source documents behind a sample of transactions. Depending on the program it may extend to payroll records, shareholder loan detail, or the support behind specific expense claims. It is a documentation request with a deadline, and almost all of it is material you should already have.
You can, and plenty of owners do, but volunteering explanation beyond what was asked is how a narrow review becomes a wider one. Once we are authorised on your account, the correspondence comes to us and the answers go back in writing, scoped to the question. That is not about hiding anything. It is about answering precisely.
Then it gets corrected, the adjustment is carried into your books, and we work out with you whether a payment arrangement is needed. Interest and penalties can sometimes be reduced through relief provisions where there were genuine circumstances behind the error. If the assessment itself is wrong and needs formally disputing, that is the point where a CPA or a tax lawyer belongs in the room, and we will say so.
Most repeat exposure comes from the same handful of habits: personal and business spending mixed on one card, contractors who are working like employees, and big year-end journal entries that true the books up to a number. Those are all bookkeeping-side problems, which means the fix is in the monthly rhythm rather than in anything that happens at tax time.
