Infographic text: Audit process for charities

This page contains the text version of the infographic used to explain the audit process for charities.

Education first

The Canada Revenue Agency (CRA) takes an education-first approach to help registered charities follow the rules. These tools help charities comply:

  • website
  • outreach program
  • client service
  • reminder letters
  • audit program
  • Charities Education Program

Selection

How is a charity selected for audit?

A charity can be selected for audit for various reasons including the following:

  • random selection
  • complaints from public
  • media articles or other public sources
  • information from T3010 annual return
  • past non-compliance

Audit

How does the CRA audit a charity?

The CRA reviews the finances and programs of charities to make sure they follow the rules and operate for charitable purposes. The type of audit depends on the charity’s size and complexity.

Office audit

Office audits are conducted at CRA offices and examine:

  • the charity’s file
  • publicly available information
  • some books and records

Field audit

Field audits are conducted at the charity’s place of business and examine:

  • the charity’s file
  • publicly available information
  • all books and records

The CRA works closely with charities and accepts additional information throughout the process.

Results

What happens after an audit? (listed in order of frequency)

Audit outcome:

  • Minor concerns
    • education letter
       
  • Moderate concerns
    • compliance agreement
       
  • No concerns
    • no action
       
  • Serious concerns:
    • registration revoked
    • registration annulled
    • sanctions

If a charity disagrees with the CRA’s findings, it can respond. The CRA reviews the response and determines the appropriate action.

Note

More than 90% of audited charities are able to continue their charitable work. 

Recourse

What can a charity do if the CRA proposes sanctions or revocation?

  • the charity has 90 days to file an objection with the CRA’s Appeals Branch

  • if the charity disagrees with the result of the objection, it can appeal to the Federal Court of Appeal or the Tax Court of Canada

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