The focus of this type of Canada Revenue Agency (CRA) audit is on new businesses, and the workload is generated by the first GST/HST return filed with a refund balance. Generally, the start up costs incurred by the business results in a GST/HST refund claim. The purpose of these audits is to establish early contact with the owners and managers of the new business. The role of the CRA auditor is to:
- Ensure the existence of a business;
- Ensure the taxpayer is aware of their rights and obligations;
- Determine the adequacy of the books and records to support the GST/HST payable, the input tax credits, and in general, all revenue and expenses;
- Make recommendations where the books and records are found to be inadequate; and
- Provide answers to taxpayer enquiries.