What to take away
- An audit examines your books and records in detail and can reach personal records and the records of related people and entities.
- If the auditor proposes a reassessment, you receive a proposal letter and have 30 days to agree or disagree.
- Good records and prompt, complete answers shorten the process; missing records cause delays.
An audit is not the same as a review
Many people use “audit” for any CRA letter that asks questions. They are often different things. A request for receipts to support a particular claim is frequently handled as a smaller review of a return, and our guide to CRA letters covers that path. An audit is broader: the CRA closely examines the taxpayer’s books and records to confirm that tax laws are being followed and that benefits and refunds are correct.
Check the letter to see which one you have. If it names an audit, or an auditor contacts you directly, the rest of this article applies. If you are unsure, ask the person named on the letter and note their answer.
How a file is chosen
According to the CRA, a file is chosen for audit through a risk assessment. The assessment looks at factors such as how likely or how frequent errors are in returns, or indications of non-compliance. The CRA also considers the information it already has on the taxpayer, may compare it with similar files and may use information from other audits or investigations.
Selection is not a finding that you did something wrong. It does mean your records need to be able to explain your return, so the habits that matter are the dull ones: reconciled accounts, filed receipts and a note of why unusual items were treated as they were.
First contact and where it takes place
An auditor will contact you by mail, by phone, or both, to begin the process and give the date, time and location. Normally an on-site audit takes place at your residence, your place of business or your representative’s office, and the auditor shows valid identification on arrival. If the audit is not on-site, it is done at a CRA office, and because some files are managed centrally you may be assigned an auditor outside your region who asks you to bring or send documents.
Wherever it happens, the auditor may copy electronic records or borrow documents. The CRA says the auditor gives you a detailed receipt for borrowed documents and returns them as soon as possible. Auditors cannot receive records by email; ask the auditor how to send documents through the CRA’s secure services. Keep a log of what you provided and when.
What the auditor can examine
The CRA lists the information available to it, such as filed returns, credit history and property details, along with your business records: ledgers, journals, invoices, receipts, contracts, rental records and bank statements. It also lists your personal records, such as bank, mortgage and credit card statements.
The scope can be wider than owners expect. The CRA states that the personal or business records of other individuals or entities not being audited, such as a spouse, family members, corporations, partnerships or trusts, can be reviewed, and that the auditor may ask the people who make your accounting entries about your operations. Adjustments made by a bookkeeper or accountant for tax purposes are also examined, which is why working papers matter.
Your responsibilities and your records
By law you must keep adequate books and records, generally for a minimum of six years, and records kept on a computer must be kept in an electronically readable format. The CRA says that for an audit you must make all relevant records, paper and electronic, available, and give complete and timely explanations. Failure to provide required books and records is an offence, and using a tax professional does not remove your own responsibility.
If you no longer have a record, the CRA says to try to get copies from whoever created it, such as a bank or supplier. If you cannot, discuss it with the auditor or the auditor’s team leader, who will work with you on other ways to confirm the amounts. Our article on how long to keep business records covers the retention rules.
Authorize your accountant and prepare early
If you want your accountant to speak to the auditor, set up the authorization first, so the auditor can deal with them from the start. Our article on how to authorize your accountant with the CRA explains the routes and the access levels.
Then organize before the first meeting. Build an index of the records the audit covers, tie your return figures to the underlying documents, and list items you cannot support so they are raised on your terms. Answer only what is asked, accurately, and keep copies of everything you send. Do not alter or recreate records to fill gaps. Our CRA audit support service page describes how Sora can discuss representation and the limits of that help.
How an audit ends
After examining the records, the auditor may find your assessment was correct. In that case you receive a completion letter and the audit closes. If a reassessment is needed, whether more tax or a refund, you receive a proposal letter explaining why, and you have 30 days to agree or disagree.
If you disagree, the CRA encourages you to contact the auditor, explain why and send documents that support your position. If the issue remains unresolved, you can contact the auditor’s team leader, whose details are in the correspondence. At the end, a final letter says whether there is no adjustment, more tax owing or less. When more tax is owing, the auditor can give an estimate before the notice is issued, so you can pay all or part right away and limit interest.
If you still disagree after the reassessment
If you do not agree with a reassessment, you have the right to appeal it through the CRA’s dispute process. Objections have firm deadlines that run from the notice date, so record that date the day the notice arrives. Our article on how to dispute a CRA assessment sets out the steps, the deadlines and what happens to collection.
How long an audit takes depends on the state of your records, its scope, delays from missing records and whether the auditor consults other CRA specialists. Because penalties, interest and objection rights can all turn on the details, it is sensible to speak to an accountant or, where legal questions arise, a lawyer before you sign anything or agree to a position.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- RC4188: What you should know about auditsCanada Revenue Agency
- Where and how long to keep recordsCanada Revenue Agency
- Business recordsCanada Revenue Agency
- Resolving your dispute: Objection rights under the Income Tax ActCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.