An Audit Notification Letter (along with SP2 — the Audit Instruction Letter) can arrive for many reasons: an overpaid tax return requesting a refund, third-party data mismatches, a risk profile flag, or simply a procedural obligation. Whatever the trigger, the following seven preparations determine how smoothly the process goes.
- Verify the letter and understand its scope. Check the type of audit (office or field), the tax year under review, and the tax type. This scope limits what the auditor may request — and what you need to prepare. Also note the identity of the audit team listed.
- Form an internal team with a single point of contact. Appoint one person in charge (usually a finance/accounting manager, supported by a tax consultant if available). All data requests and responses go through one channel, documented in writing. Inconsistent verbal answers from different employees is a classic source of trouble.
- Gather core documents before they're requested. Standard items: tax returns and filing proof, financial statements, general ledgers, all bank statements, output/input tax invoices, withholding certificates, major contracts, and supporting documents for significant expenses. Organize by tax year and tax type — an auditor handed organized documents tends to work faster and stays focused.
- Perform a three-way turnover reconciliation. This is the heart of almost every audit: turnover per financial statements vs. per the annual income tax return vs. total per the periodic VAT returns (and bank statement mutations). Reasonable differences — down payments, returns, non-VAT-object sales, differences in recognition timing — need to be explained before being asked. An unexplained gap almost always becomes a correction.
- Review commonly-corrected line items. Entertainment expenses without a nominative list, expenses unrelated to the business, depreciation in the wrong asset class, related-party transactions, and shareholder receivables/payables. Better to find your own weak spots first — so you can prepare an argument or, if needed, an amendment.
- Understand your rights in the process. You're entitled to request an explanation of the audit's basis, receive the Audit Findings Notification Letter (SPHP), submit written responses, and attend the closing discussion. Use these stages — many findings get dropped at the closing discussion when the taxpayer arrives with solid documents and arguments.
- Stay cooperative, but keep everything documented. Fulfill data requests within the given timeframe, get a receipt for every document handed over, and don't hand over documents outside the audit scope without consideration. Cooperative doesn't mean passive — it means professional.
The best prevention happens well before the letter arrives
Businesses that reconcile their bank accounts every month, keep bookkeeping turnover consistent with their tax returns, and archive supporting documents are essentially "always audit-ready." At that point, an audit shifts from a crisis to a routine administrative procedure — which is exactly why we treat bookkeeping quality as inseparable from tax matters.
Disclaimer: This article was prepared as general information as of April 24, 2026 and does not constitute tax advice for any specific case. Tax regulations are subject to change. For guidance on your specific business situation, please consult the Sentary Consulting team or a registered tax consultant.