Mastering Post-Audit SR&ED Wins

As we conclude our “SR&ED Audit Survival Tips” series, this fourth and final installment explores what to expect after a SR&ED audit. Understanding the post-audit landscape is crucial for effectively managing the outcomes of your claims and improving your strategies for future submissions.

Reviewing Auditor Feedback

After the audit, taking the time to thoroughly review the auditor’s feedback is crucial. Understand and respond appropriately to any requests for additional information. This may involve clarifying specific points or providing supplementary documentation to support your claim. It’s important to address these requests promptly to ensure a smooth resolution and to demonstrate your commitment to compliance.

Action Plan for Audit Findings

If discrepancies or issues were raised during the audit, developing an action plan is your next critical step. This should include detailed steps to address any findings and, if necessary, amend your claims. Correcting these discrepancies may involve adjusting project descriptions, expenditure details, or other elements of your SR&ED submission.

Post-Audit Expectations

• Communication of Results: The CRA typically communicates the findings of the audit through your CRA My Business Account, ensuring that you receive the results swiftly and can review them promptly. In some cases, they may also opt for a closing meeting with the claimant to discuss the results and any adjustments to the claim in detail. This approach allows for immediate clarification and response if necessary.
• Assessment Notice: Following the communication of results, the CRA issues a Notice of Assessment (or Reassessment), which outlines the final decision on your SR&ED claim, including accepted expenditures and awarded investment tax credits (ITCs).
• Payment or Adjustment: If your claim is accepted, either fully or partially, the CRA will process the payment for the approved amount. Should there be any discrepancies or disallowed expenditures, these will be detailed, requiring you to adjust your financial records accordingly.
• Possibility of Appeal: If you disagree with the audit’s findings, you have the option to file an objection within 90 days of receiving the Notice of Assessment. The CRA’s Appeals Branch will review your case, where you can present additional documentation or arguments to support your claim.
• Learning and Improvement: The audit process offers valuable insights into the CRA’s documentation and claim preparation expectations. Use this knowledge to enhance the quality of your future SR&ED claims.

Conclusion

As we wrap up our “SR&ED Audit Survival Tips” series, we’ve explored everything from the initial triggers and documentation best practices to effective strategies for communicating with auditors. Each phase, detailed through our guides, equips you with the necessary knowledge to handle SR&ED audits with confidence.

Remember, SR&ED audits shouldn’t be feared, and they are not just about compliance but also about opportunities for learning and improvement. With the right preparation, understanding, and strategic response, you can transform the audit process into a valuable learning experience that strengthens your future claims. If you need assistance navigating any aspect of the SR&ED program, from claim preparation to post-audit procedures, reach out to our expert SR&ED team today. Together, we can ensure that your innovative efforts are recognized and rewarded, enhancing your potential for successful outcomes in future audits.

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