What Does It Actually Mean to Be Audit-Ready And Why Do Books Behind Reality Create CRA Exposure?

22 Oct 2026 · 1 min

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In this segment, bookkeeping expert Bob Gauvreau explains how to quickly assess whether a company's books are audit‑ready and free from Canada Revenue Agency (CRA) exposure. He outlines a two‑step diagnostic: first, open the bookkeeping file and review the last 12 months of profit‑and‑loss statements side‑by‑side to spot unusual changes in operating expenses; second, examine the reconciliation settings for bank and credit‑card accounts to see the date of the most recent reconciliation. Reconciliations act as a catch‑all check that the bookkeeping reflects actual bank activity; if the last reconciliation is months old, the books are considered stale. Gauvreau advises that such lag signals the need to engage a professional to keep records current, thereby maintaining audit readiness and minimizing CRA risk.

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For someone like me, I can very quickly identify whether your bookkeeping is complete or not. But the number one test for you, one, I would open up your bookkeeping document. I would open up the last 12 months. I would look at a profit and loss over a 12-month period with each month comparing beside the other. Very quickly, if you're looking at operating expenses or overhead costs, you can likely see that, you know, 8 months ago there were more and maybe there's less. That's a first indication. But if you really want to see, go into your reconciliation settings and see when your banks and your credit cards were last reconciled. Reconciliation is the check that makes sure that everything is complete that's in there. It checks between what goes on in your bookkeeping and your bank accounts. So if something has hit your bank account and it's not reflected in your books, A reconciliation will catch that. It's the catch-all to make sure that your books are complete. And based on the last date of the reconciliation shows that that completeness is up to date. So if I'm looking, the first thing I will go to is the settings reconciliation. When was the last time this has taken place? And if it's been months, then it's time to be looking for someone who can keep this up a little bit more current for you.