CRA Small-Business Audit — Montreal CPA Firm Near You: Cash, COGS, Draws Under Control

A CRA Small-Business Audit is one of the most common and high-impact reviews entrepreneurs face. Whether you own a café, construction company, online store, or consulting firm, the Canada Revenue Agency (CRA) uses data analytics to compare your income, expenses, and owner draws against business averages.
Mackisen CPA Montreal specializes in defending small businesses by building complete audit-proof records — balancing cash flow, cost of goods sold (COGS), and personal draws — so CRA recognizes your reporting as transparent, accurate, and compliant.

Legal Foundation

Law: Income Tax Act s.231.1–231.2 (CRA audit powers); Excise Tax Act s.289 (GST/HST verification).
Jurisprudence: Fortino v. Canada (1997 TCC) — CRA entitled to verify all financial records of owner-managed businesses where personal and business finances overlap.

Learning insight: CRA doesn’t separate “you” from your business — your records must. Mackisen CPA ensures your books tell a clean, independent story.

Why CRA Targets Small Businesses

CRA’s audit algorithms flag small businesses because they often rely on manual bookkeeping, cash transactions, or family help. These variables increase the risk of record gaps.
Common triggers include:

• Cash-heavy operations or missing POS records.

• Large expense claims relative to income.

• Owner draws not matching reported profits.

• Payroll or subcontractor payments without T4A slips.

• High cost of goods sold (COGS) compared to gross income.

Learning insight: CRA isn’t targeting success — it’s targeting inconsistency. Mackisen CPA proves that your results are real, not random.

How CRA Conducts a Small-Business Audit

1. Pre-Audit Risk Screening: CRA uses AI-driven data to flag anomalies.

2. Audit Notice Issued: CRA specifies the years and accounts under review.

3. Books & Records Request: Includes invoices, contracts, POS data, and ledgers.

4. Owner-Draws Analysis: CRA checks personal spending against reported income.

5. Field Review or Desk Audit: Auditors verify deposits, COGS, and tax filings.

6. Assessment or Clearance: CRA issues a reassessment or closes the file.

Learning insight: CRA’s math is automated, but its conclusions are human — and that’s where a CPA’s narrative matters most.

Mackisen CPA’s Proven Audit Defense System

1. Financial Integrity Review: We reconstruct your accounting books to align business and personal records.

2. COGS Reconciliation: Every purchase, inventory adjustment, and supplier payment is tied to income flow.

3. Owner-Draw Analysis: Document the purpose, source, and repayment of personal draws to avoid double taxation.

4. Cash-Flow Verification: Compare deposits, sales, and expenses to prove transparency.

5. Audit Representation: Communicate directly with CRA auditors to maintain control of the process.

Learning insight: Audit defense is not about hiding data — it’s about presenting it intelligently. Mackisen CPA makes every number speak compliance.

CRA’s Focus Areas in Small-Business Audits

• Cash Transactions: Missing sales or deposits raise immediate red flags.

• Payroll Compliance: CRA reconciles payroll remittances, T4/RL-1 slips, and expense deductions.

• COGS Accuracy: High material costs without matching sales trigger CRA recalculations.

• Owner-Draw Reconciliation: Withdrawals inconsistent with business income can appear as undeclared income.

• GST/QST Filings: CRA compares FPZ-500-V returns to your income statements.

Mackisen CPA Montreal reviews every one of these risk areas proactively, providing evidence before CRA asks.

Learning insight: CRA audits end faster when answers come before questions — Mackisen CPA ensures you’re always ahead of the curve.

Real Examples of CRA Small-Business Audits

• A Montreal restaurant cleared a $145,000 reassessment when Mackisen CPA reconciled cash sales and supplier purchases through daily POS summaries.

• A construction contractor avoided penalties when we linked subcontractor T5018 payments to valid contracts and GST remittances.

• A self-employed consultant passed a CRA net-worth test after we documented all personal draws and expense reimbursements.

Learning insight: CRA doesn’t close files based on explanations — it closes them based on evidence. Mackisen CPA provides that evidence in airtight form.

SEO Optimization and Learning Value

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Secondary Keywords: CRA COGS audit, owner-draw verification, GST QST reconciliation, small business CRA representation, CRA cash audit Montreal.

Learning insight: The same clarity that boosts your audit defense also boosts your online credibility. Mackisen CPA builds both.

Why Mackisen CPA Montreal

With more than 35 years of combined experience in small-business accounting and CRA audit defense, Mackisen CPA Montreal provides complete representation — from financial reconstruction to final CRA clearance. Our bilingual team works directly with CRA and Revenu Québec to ensure your business stays compliant, credible, and profitable.

Learning insight: Every small-business audit is an opportunity to strengthen your financial systems. Mackisen CPA turns defense into long-term discipline.