How to Prepare for a GST/QST Audit: Steps to Stay Audit-Ready — Montreal CPA Firm

A GST/QST audit is one of the most stressful events a business can face. The letter arrives unexpectedly: “Your GST/QST account has been selected for verification.” Suddenly, every invoice, receipt, bank statement, and credit note becomes evidence. Many businesses panic — not because they did anything wrong, but because their documentation is incomplete or disorganized. Revenue Québec and CRA are extremely strict when reviewing records, and even small errors can lead to reassessments, penalties, and interest. This guide shows you exactly how to prepare for an audit using the same methodology we apply at Mackisen CPA Montreal to protect clients long before an auditor arrives.

Why Audit Preparation Matters
Audits are not random. CRA and Revenue Québec use algorithms to identify high-risk returns: large refunds, inconsistent filings, negative balances, or mismatched GST/QST collected vs. sales. If you are unprepared, even legitimate expenses may be denied. Audit preparation is not something you do after an audit begins — it must be done continuously.

Legal and Regulatory Framework
CRA conducts audits under the Excise Tax Act, Revenue Québec under the Tax Administration Act. Section 284 requires taxpayers to keep complete records for six years. Hickman Motors (1997, SCC) states the burden of proof falls on the taxpayer. Canderel (1998, SCC) requires that financial reporting reflect commercial reality. Lac d’Amiante (2001, SCC) confirms RQ’s authority to reassess when documentation is weak or inconsistent.

What Happens During a Real Audit
Imagine this: An auditor asks for all invoices for the last eight quarters, proof of payment for every expense, detailed sales reports from Shopify, Stripe payout summaries, and a reconciliation showing how GST/QST numbers match your general ledger. You scramble. Some suppliers never put their GST/QST numbers on invoices. Half the receipts are missing. The auditor notes inconsistencies and begins expanding the audit into previous years. Your refund is frozen. Every day that passes increases the anxiety and financial pressure. This scenario happens daily — but it is completely avoidable with proper preparation.

Learning Section: Why Audits Happen
Audits are triggered by:
Large GST/QST refunds
Late filings or repeated amended returns
Industry risk (construction, retail, e-commerce)
Unusually high ITCs/ITRs
Cash-based operations
Missing mandatory filings
Bank deposits not matching reported sales
Your business may be perfectly legitimate, but the system flags risk — not guilt.

SEO Learning: Primary and Secondary Keywords
Primary: GST QST audit Quebec, prepare for GST audit, QST audit help Montreal, CRA audit steps.
Secondary: sales tax documentation Quebec, GST QST reconciliation, audit-proof bookkeeping, Revenue Québec audit preparation.

Step-by-Step Audit Preparation System
Step 1: Maintain complete invoices showing GST and QST.
Step 2: Keep proof of payment for every expense.
Step 3: Reconcile monthly so numbers match your books.
Step 4: Store bank statements, merchant reports, and POS data.
Step 5: Prepare quarterly GST/QST reconciliation sheets.
Step 6: Keep credit notes and refund documentation.
Step 7: Organize export documentation for 0% transactions.
Step 8: Save CRA/RQ confirmations for all filings.
Step 9: Keep a digital audit folder ready at all times.

Documentation Section: What You Must Keep
Sales invoices
Purchase invoices
Proof of payment
Merchant statements
Bank statements
POS summaries
Expense reports
Contracts and agreements
Reconciliation worksheets
Export/shipping documentation
All records must be kept for six years. Missing documentation = denied credits.

Common Mistakes That Trigger Reassessments
Claiming ITCs/ITRs without invoices
Claiming personal expenses
Missing supplier tax numbers
Incorrect GST/QST coding
Inconsistent e-commerce reporting
Filing late or amending returns frequently
Not matching deposits to sales

Winning With Revenue Québec and Canada
Mackisen prepares a full audit binder for each client, with indexed tabs, copies of invoices, payment proofs, reconciliation sheets, sales summaries, and tax filings. When an auditor arrives, everything is ready. Our preparation often results in audits closing quickly with no adjustments.

Mackisen Service Hub
We provide:
GST/QST audit defense
Audit-preparation file building
Pre-audit reconciliation
Communication with auditors
Refund release support
Legal and CPA oversight
Our team defends you at every step.

Why Mackisen
With more than 35 years of CPA and audit experience, Mackisen CPA Montreal ensures your GST/QST filings are accurate and fully defensible, protecting your business from penalties, stress, and costly reassessments.