The Australian Tax Office (ATO) has recently increased its random audits to ensure businesses comply with employment tax regulations and record-keeping practices. This includes employment taxes like PAYG, FBT, and superannuation, marking a significant shift from its previous focus on individual and business income tax returns. It's crucial to note that businesses of all sizes and turnovers are subject to these random audits.
Getting ready for an audit is unlikely to be one of your favourite things to do as a business owner. But being prepared, organised and ready can take some of the pain out of an audit.
Planning for your audit helps your auditor get their job done more quickly, and also means there’s minimal disruption to your staff and business during the process.
Let's take a look at five key ways to be ready for an audit.
In advance of the audit date, be sure to:
Gather all the relevant documentation – this documentation will include financial statements, bank statements, expenses, management information and any other documentation that your auditor is likely to ask you for.
Organise your documentation in a logical way – the whole audit will be far easier to complete if your financial data and documentation is well-organised. Make it simple for the auditors to find what they need, and ensure there’s easy access to all information.
Identify any potential financial issues – the last thing you want is a giant problem coming up in the middle of your audit. So, it’s a good idea to check for any financial issues or irregularities that the auditor may flag up. Doing this well in advance gives you enough time to address any issues and resolve them before the audit begins.
Be prepared to answer questions – it’s likely your auditor will want to ask some probing questions about your business and financial records. Make sure you’re up to speed with your accounts and be prepared to answer these questions honestly.
Cooperate with your auditor – the auditor’s job is to ensure that your financial statements are accurate and that your business is in compliance with all applicable regulations. This will be much easier to do if you cooperate with them, answer their questions with good grace and quickly provide them with any information they need.
Talk to us about getting audit-ready.
If you’re thinking that your company finances might not be quite ‘audit-ready’, you’re definitely not alone. Many businesses are not quite as organised with their financial management as they’d like to be. But don’t worry, help is at hand!
If you’d like some assistance with reviewing the health and organisation of your financial processes, we can help you get in control of your finances
Get in touch to review your financial management.