My current location: Los Angeles, CA | Change location
Featured Legal Services
Wang, Hartmann, Gibbs & Cauley, P.L.C. Providing Exceptional Representation for Businesses. Call Today to Speak with Our Attorneys. 1-888-WHGCLaw (944-2529)
1-888-WHGCLaw

Ten Things to Think About: What Is an Auditor Looking For?

Below are ten things auditors commonly search for when auditing businesses.
  1. Was all your business income reported, including cash, goods, property, or services received by the business?


  2. Did you deduct personal expenses as business expenses? An auditor will pay close attention to auto deductions, entertainment expenses, meals, and travel.


  3. Have you met your payroll tax obligations and made timely tax deposits for your employees?


  4. Are you living larger than your income appears to warrant?


  5. Does your business checking account activity match your business records? Beware, a business audit does not mean that your personal financial records will not be reviewed. The auditor is entitled to see both your business and personal records.


  6. Are your financial records complete and well maintained?


  7. If you are required to pay sales tax, does the amount you paid match the sales you show in your business records?


  8. Did you deduct a business expense in the proper year? Tax rules cover when a business expense can be deducted. A "current" expense is deductible in the year it was incurred. A "capital" expense may have to be deducted over a longer period.


  9. Do you have a business expense that appears too extravagant for the type of business you operate?


  10. Do you deal with relatives or relatives' businesses? Auditors look at "related party" transactions to see if your business is shifting taxable profits to family members and then using the shift as a business deduction.

FAQs

More

Find a Lawyer

Legal Issue
Location

Taxes for Business Forms

See All State-Specific Legal Forms [$]

Sponsored Services
Under Attack? Need a Lawyer?
Lien? Levy? Tax Casepost Lawyers protect your rights. Post your case= They respond
More Sponsored Services
Form a Corporation
Legal Ace.com has the turn key online system to make starting a corporation easy and affordable.
Incorporate Online - Legalzoom:
Form a corporation or LLC quickly and easily. From LegalZoom, the #1 legal document service.
Incorporate/Form LLC Online:
- Order LLCs or Corporation, Registered Agent, Trademark, or Dissolution Service or buy Corporate Kits & Seals. One stop shopping!
Incorporate Online:
LLCs, Corporations, Corporate Dissolutions, Aged Shelf Corporations. We will beat any competitor's price on Registered Agent or Incorporation services!

Business Taxation

Editors' Picks

Bookshelf

Full-text books you can read for free online:

See All Bookshelf Titles