For pretty much any taxpayer in Australia, you can be subject to an audit by the Australian Taxation Office (ATO). Audits can be overwhelming because of the need to produce the right paperwork and records. It can be a tad confusing to know where to start.
But if you engage certified practising accountants to help, the process becomes not only manageable but takes the stress out of it for you. Additionally, it’s possible a thorough audit provides valuable insights into your business operations, identifies areas for improvement, and ensures compliance with Australian regulations.
What is a certified practising accountant in Australia?
In Australia, a certified practising accountants is a qualified professional who has completed extensive training and is a member of CPA Australia. This designation ensures that they meet strict ethical, technical and professional standards. They are trusted advisors who provide expert financial, tax, and business guidance, with the ability to support businesses through complex financial challenges—including audits. Just like your professional team at Piteo Accounting & Advisory.
What can happen during an audit?
An audit is an independent examination of your financial statements and systems. It verifies that your records accurately reflect your financial position and that you are compliant with relevant laws. Audits may be triggered by the ATO investors, lenders, or as part of your organisation’s governance requirements. If errors, omissions or non-compliance are identified, the consequences can include penalties or fines, delays in funding or investment approvals, reputational damage, the need to amend financial statements, or further investigation from regulators. Being well-prepared for an audit reduces risk and shows stakeholders that your business is organised, compliant, and professionally managed.
How certified practising accountants help before and during an audit
Certified practising accountants review your records to ensure they are complete and consistent. They help identify and resolve most issues before they become problems during an audit or flag the ATO that an audit may be required.
Red flags can include:
- unexplained large transactions,
- mismatches between ledger entries and bank statements,
- missing invoices or receipts,
- outdated or inaccurate asset valuations, and
- recurring cash flow issues.
They also implement effective internal controls such as systems and procedures designed to protect your business from fraud and error. Examples include separating duties (e.g. the same person shouldn’t approve and process payments), requiring authorisation for expenses, regularly reconciling bank accounts, maintaining an accurate asset register, and controlling access to financial systems. Certified practising accountants can evaluate your controls and recommend improvements to strengthen financial governance.
Australian businesses must follow a range of compliance obligations. Certified practising accountants ensure you meet requirements including goods and services tax (GST), PAYG withholding and superannuation for employees, fringe benefits tax (FBT), corporate tax returns, payroll tax and land tax (state-based), and financial reporting and ASIC governance standards. Falling behind on these responsibilities can increase your audit risk and lead to penalties.
You may be liable if ‘…you make a false or misleading statement (for example, in a tax return, activity statement or amendment request) that results in you having a shortfall amount,’ states the ATO. The penalty rate can be up to 75% of the shortfall amount if it’s found to be of intentional disregard.
That’s not to mention the hours it takes to provide all the required documentation for the audit itself. That’s why it pays to engage a certified practising accountant from the start.
What is required for an audit?
Every audit is slightly different, but typically you will need to provide annual financial statements, your trial balance and general ledger, bank statements and reconciliations, purchase and sales invoices, payroll records and employee summaries, tax return documentation, BAS and GST lodgements, loan agreements and finance documents, asset registers, and minutes from board meetings (if applicable). Certified practising accountants help prepare, organise and review these documents to ensure accuracy and completeness.
How do you know what you’ll need?
Piteo Accounting & Advisory work directly with auditors or the ATO to determine exactly what is being asked for. They can provide you with a tailored audit preparation checklist, generate detailed reports and account schedules, answer audit queries on your behalf, and coordinate timelines to ensure the audit is completed efficiently. Their support helps reduce stress, prevent delays, and improve your audit outcomes.
Engaging a certified practising accountant gives you expert support and communication throughout the audit process. From identifying issues and preparing records to ensuring full compliance with Australian laws. It’s not just about avoiding penalties; it’s about gaining clarity, confidence and control over your financial position that plays out long-term.
At Piteo Accounting & Advisory, our Adelaide-based certified practising accountants have extensive experience helping businesses of all sizes mitigate and prepare for audits.
Don’t hesitate to reach out if you have questions about being audited or want to make sure your business is fully compliant.
Disclaimer: It is important to seek the advice of a qualified professional before making any financial or accounting decisions. Each individual’s financial situation is unique, and not all information provided may be relevant to your specific circumstances.
