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

A CRA Small-Business Audit targets owner-managed corporations, partnerships, and sole proprietorships where personal and business finances are often intertwined. The audit focuses on cash income, cost of goods sold (COGS), shareholder draws, and expense documentation. Mackisen CPA Montreal specializes in defending small-business owners through precise bookkeeping reconstruction, ratio testing, and documentation strategies that separate personal and corporate transactions—ensuring CRA and Revenue Québec recognize legitimate deductions and income.

Legal Foundation

Law: Income Tax Act s.231.1; Tax Administration Act (Québec) s.36; Excise Tax Act s.286–289.
Jurisprudence: Fortino v. Canada (1997 TCC) — established that CRA may infer unreported income from indirect evidence, but taxpayers are entitled to explain discrepancies through proper accounting proof.

Why You Need a CPA for a Small-Business Audit

CRA small-business audits are among the most common yet the most financially disruptive. They test not only your income but your systems—your ability to separate business from personal spending, substantiate expenses, and maintain credible books. Mackisen CPA Montreal ensures every document, receipt, and bank transaction is categorized correctly, reconciling the story your numbers tell.

Learning insight: CRA reads your lifestyle as much as your ledger. A CPA ensures both reflect the same truth.

What Mackisen CPA’s Small-Business Audit Defense Includes

• Complete reconstruction of income and expense records where documentation is incomplete.

• Verification of cash deposits and e-transfer income to avoid duplication.

• COGS analysis to match purchases and sales with supplier invoices.

• Documentation of shareholder loans, capital contributions, and personal draws.

• Expense validation through receipts, bank statements, and client contracts.

• Preparation of CPA-certified reconciliation schedules and defense binders.

Learning insight: CRA assumes what you can’t prove doesn’t exist. Mackisen CPA ensures proof exists for everything you report.

Common Triggers for CRA Small-Business Audits

• High expense ratios compared to revenue.

• Inconsistent personal lifestyle relative to declared income.

• Frequent cash deposits or withdrawals.

• Missing or incomplete bookkeeping.

• Discrepancies between GST/QST and income-tax filings.

Our CPA team identifies these red flags early and provides corrections before CRA turns an inquiry into a reassessment.

How Mackisen CPA Manages Small-Business Audits

1. Conducts an initial CRA/ARQ letter review to define the audit’s scope.

2. Performs a full reconciliation of sales, purchases, and expense accounts.

3. Identifies missing or weak documentation and reconstructs proofs.

4. Communicates directly with CRA/ARQ officers using professional CPA correspondence.

5. Files legal memoranda where required to protect taxpayer rights and confidentiality.

Learning insight: CRA expands audits when records are unclear. Clarity is your best defense—and your CPA is your translator.

Benefits of Professional Representation

• Reduces the risk of costly reassessments or penalties.

• Prevents audit scope expansion to multiple years or related entities.

• Improves credibility with CRA and Revenue Québec auditors.

• Ensures full deduction capture while maintaining compliance.

• Provides documentation that doubles as future audit protection.

Learning insight: A small-business audit can either cost you or certify you. Professional CPA defense turns it into your compliance milestone.

SEO Optimization and Learning Value

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Secondary Keywords: CRA shareholder draw audit, GST QST small business compliance, CRA bookkeeping audit, Mackisen small business representation.

Learning insight: CRA small-business audits test consistency—between your statements, lifestyle, and ledgers. Mackisen CPA makes all three align flawlessly.

Real Client Success

• A Montreal café avoided a $48,000 reassessment when Mackisen CPA reconciled cash register tapes with bank deposits and supplier invoices.

• A construction company cleared an underreported-income claim after our team proved personal deposits came from shareholder loans.

• A consulting firm recovered $18,000 in denied expense deductions after providing organized digital receipts and CPA-certified proofs.

Why Mackisen CPA Montreal

Mackisen CPA Montreal brings decades of small-business accounting experience and legal audit defense under one roof. We understand the entrepreneur’s reality—imperfect records, cash-based transactions, and CRA scrutiny—and translate it into legally compliant, audit-ready documentation.

Learning insight: A small-business audit doesn’t measure perfection—it measures proof. Mackisen CPA turns everyday operations into defensible evidence.

Learning conclusion: A small-business audit is a story CRA already started writing. Mackisen CPA Montreal ensures you finish it—with proof, precision, and peace of mind.