Key Takeaways
- Topic: Do I Have to Provide All the Documents the Auditor Is Requesting?
- Do I have to provide all the documents that the auditor is requesting? Yes and no.
- So, if the auditor wants to see the documents, they do have summons authority, and they can make your life quite difficult.
Do I have to provide all the documents that the auditor is requesting? Yes and no. So, if the auditor wants to see the documents, they do have summons authority, and they can make your life quite difficult. Alternatively, if the auditor doesn’t get all the documents that they want, the auditor can make a note of it in their audit report and resort
to guessing.
Chances are, if you get into a fight with them over documents and they have to resort to guessing, they’re not going to guess very much in your favor. The good news is that audits are negotiable, particularly when coming up with the audit plan. The CDTFA has, in its goals, a goal to be as efficient as possible because of the amount of time that sales tax audits take. So one of the biggest things for clients is negotiating with the auditor ahead of time to reduce the scope of the documentation that you’re being asked to provide. If the auditor samples a year of sales invoices, for example, out of a
three-year
audit, and that year of sales invoices comes out perfect, then you have a great argument to make that there’s no reason to dig up an entire two more years of records to go through the same exercise. Same thing with purchase invoices. These are the things that are often
most cumbersome.
So, what I would do in the beginning is, again, create a plan for the audit, analyze and understand your risk going in, and then steer the auditor towards the direction of producing only the documents that you need for them to verify sales and to get through the audit as quickly and as cleanly as possible. This will avoid any conflict with the auditor and will move your audit through a lot more efficiently and
much faster.
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