As Canadians prepare for the 2025 tax season, Toronto-area accounting firm Business Minding Services has published a new educational report designed to help individuals and business owners understand the common triggers that may lead to a Canada Revenue Agency (CRA) audit.
The report, released this week, aims to dispel misconceptions around CRA audit selection and offer clear, actionable guidance on reducing risk. Drawing on years of client service in the Greater Toronto Area, the Ontario CPA firm highlights the real factors behind audit decisions — many of which go overlooked by taxpayers.
“Every year around this time, we see a lot of anxiety and misinformation about CRA audits,” said a spokesperson for Business Minding Services. “Our goal is to provide clarity and empower both business owners and individuals to approach tax season with confidence, not fear.”
Understanding How Audits Are Selected
The report explains that CRA audits are typically triggered by risk assessments, a combination of automated reviews and manual checks. The CRA looks for irregularities in tax filings — such as unusually high expenses or patterns that differ sharply from previous returns — and selects cases where there is a higher likelihood of error or non-compliance.
“While it would be handy to have an ‘opt-out’ button for audits,” the report notes, “sometimes it can’t be avoided. You can do everything right, but there is also a random element to audits. However, there are things you can do to lower your risk.”
Key Audit Triggers Identified in the Report
Business Minding Services’ report identifies seven specific behaviours and patterns that often trigger an audit.
Some of them might seem fairly common sense, like claiming excessive or inconsistent business expenses.
Businesses known for their high volume of cash transactions, like home services and restaurants, are also at higher risk of a CRA audit.
However, others may be less intuitive.
For example, CRA is more likely to audit a company that provides mostly rounded numbers in their transactions. The reason the CRA provides for this is that round numbers are relatively uncommon in financial transactions. As a result, frequently reporting round numbers may be an indicator a business is estimating their numbers, rather than reporting actual transactions.
The report also emphasizes the importance of professional bookkeeping and ongoing tax planning, especially for businesses handling large volumes of cash or complex income sources.
Aiming for Clarity and Confidence
While the possibility of an audit can cause stress for many Canadians, the firm’s message is one of preparation rather than panic.
“A CRA audit is never random guesswork. There are clear patterns and reasons behind each decision,” the spokesperson added. “By knowing these triggers and keeping proper documentation, most individuals and businesses can avoid surprises. But if the CRA does come knocking, a CRA audit accounting firm can help navigate the situation.”
The full report is available now on the Business Minding Services website and offers a deeper look at each trigger, along with advice on best practices for tax compliance.
Media ContactCompany Name: Business Minding Services, Inc.Contact Person: Nigel Vasagam, CPA, CGA, FCCAEmail: Send EmailPhone: 1 416-883-2488Address:321 Don Park Rd City: MarkhamState: ON L3R 1C2Country: CanadaWebsite: https://businessminding.com/
