Getting ready for IRD tax 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.
Let's take a look at five key ways to be ready for an audit.
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 tax audit. So, it’s a good idea to check for any tax issues or irregularities that the IRD tax 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 IRD 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 tax accountant and IRD auditor – Talk to your tax accountant if you have any tax issues before talk to your IRD auditor. IRD 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 ready for IRD audit
If you’re thinking that your company tax 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!
Get in touch to review any tax issue.
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