If you are an accountant, it is not surprising to have one of your clients be subjected to an audit because the Australian Tax Office can request a review in some cases they deemed necessary. It does not mean that your business is at risk, some audits are actually harmless but costly. First, make sure that you have tax audit insurance and that your clients have too. Determine areas that could be the reason for a tax audit. You should know if there is a big difference in the activity statements of a business compared to their tax returns.
The main role of audit insurance policy is to make sure the clients will not shoulder the professional fees that might result from the unwanted auditing. For accountants as well as financial advisors, it is beneficial to their practice to be proactive when it comes to determining points in the portfolios of the client that could be a cause of an audit.
Every year, there is no assurance that your clients will be free from auditing because the Australian Tax Office could select those tax forms they think are necessary to be reviewed. This is why the professionals running the practice should be prepared in case an audit happens. The clients will be hit financially if they are to be subjected to an auditing and their trust to the firm might be broken if they think their accountants were not prepared for those cases.
Your first priority should be protecting the clients by making sure that all their activity statements in relation to the business as well as tax returns are the same. Look at other businesses in the same industry and see if your client is in line with their result. This will lower the chance of being audited.
Nowadays, tax experts recommend having a tax audit insurance that will protect the clients who are subjected to an audit. These are official processes and the taxpayers are obliged to subject their returns and financial standing. A client protected by the insurance won’t have to worry about paying legal as well as professional fees during the entire audit.