Can accountants help their clients from being selected by the Australian Taxation Office for scrutiny or any government agency for that matter?For a business, being the subject of tax audit is not something that they would want to be entangled in. It’s because this can come with related costs. For those who are not covered by audit shield insurance, it would mean having to take out money from their own pockets to pay for professional fees.
Today, there are several ways by which an accountant could help their clients from becoming the subject of audit scrutiny. For one, they should make it a point to communicate and document terms of engagements with their clients. Practitioners should also observe APES 325 which stipulates requirements and guidance for members.
But regardless of precautionary measures taken, business owners should take into consideration that there will always be a chance that government agencies could choose to audit their businesses. This is where audit shield could come in handy.
Audit shied can be provided to you by select insurance companies. Some accountants also have partnerships with insurance companies and they can recommend one for you. With this type of product, you can significantly reduce having to pay for high professional fee costs should the ATO decide to audit your business.
Butjust in case, here are some of the ways that can help you survive:
- Be ready with your goods and records to prove your claims. The government agency will be asking these from you. Did you know that there are many people who cannot prove their claims because of poor record keeping?
- Hire the best professional advisor. Professional advisors who are great at what they do often charge more than others. They could actually save you more compared to the cost of their professional fee.
- Get audit shield insurance. So this may not cover you for extra tax or penalties but it will at least have you covered on professional costs involved.
- Be mindful of what you say to the tax auditor. Less said, the better. While you may think that it was just an idle conversation, you could already be misinterpreted by the tax auditor which could hurt your case.
- Your professional advisor should be your contact point. This will help you get your books in order if needed as well as help you stay calm during the audit process.