Income Tax Auditing
The general definition of anÂ auditÂ is an evaluationÂ of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, internal auditing, and government auditing.
Auditing is defined as a systematic and independent examination of data, statements, records, operations and performances (financial or otherwise) of an enterprise for a stated purpose. In any auditing the auditor perceives and recognizes the propositions before him for examination, collects evidence, evaluates the same and on this basis formulates his judgment which is communicated through his audit report.
An auditor’s report is considered an essential tool when reporting financial information to users, particularly in business. Since many third-party users prefer, or even require financial information to be certified by an independent external auditor, many auditees rely on auditor reports to certify their information for investigation purposes.
How Canada Revenue Agency Begins an Audit
Auditing by CRA is a way to monitor, inspect and examine, so that the imposition of taxes are managed in an equitable manner with respect and compliance in accordance with the Law, by Canadians taxpayers.
In general, a client is selected on the basis of a computerized list, audit projects, selective and secondary clients. Once the client is determined to be audited, you will receive a letter saying that you have been selected to be audited by a certain date, a list of the required documents such as; accounting, reports, invoices, legal registration, expense receipts, bank account, payroll, subcontracts, nature of its business, detail information of how the business is managed and other information in connection with your trade or business. Once the client receives the letter, you should contact the Auditor otherwise you will have a reassessment with the information they have available. Therefore, we suggest talking to the Auditor who had sent the letter, and in turn get the service of a Representative or an External Auditor to represent according to the purposes and principles of auditing, as we have illustrated above.
Taking Care of Individual or Business Auditing
A Representative from Global Taxation & Accounting Systems Inc., can go over all the details of your books, records, receipts, cash expenses, bank statements, balances, ledgers, and go through all the number crunching involved in a personal or small business audit in order to possibly minimize your tax liability.
If you have been contacted by an Auditor from Canada Revenue Agency and would wish for assistance give us a call at (416) 925-2927.