Am I Audit Ready?
Assess your business audit readiness in 2 minutes. Check if your financial records, tax compliance, and documentation are ready for a SARS audit.
10 questions • Takes about 2 minutes • Free, no signup
5 Key Areas
Financial Records, Tax Compliance, Documentation, Controls, and Regulatory
SA-Specific
Tailored for SARS, CIPC, and Companies Act requirements
Actionable Steps
Get specific recommendations to close your audit readiness gaps
What does it mean to be audit ready? Being audit ready means your business has up-to-date financial records, all SARS returns filed on time, supporting documentation organized and accessible, proper internal controls in place, and full compliance with CIPC and Companies Act requirements. South African businesses should aim for a readiness score of 80+ out of 100 to be confidently prepared for any SARS audit or review.
SARS Audit Readiness FAQs
Common questions about SARS audits and audit preparation
SARS audits focus on several key areas: accuracy of income reported (comparing bank statements to declared income), validity of expense claims and deductions, correct VAT calculations and input tax claims, PAYE compliance for employee taxes, and whether supporting documentation exists for all transactions claimed. They also look for consistency between different returns — for example, whether VAT turnover matches income tax revenue.
SARS selects businesses for audit on a risk-based approach rather than a set schedule. Certain triggers increase the likelihood of being audited: large refund claims, significant year-on-year changes in turnover or profit, mismatches between third-party data and your returns, late or non-filing of returns, operating in cash-intensive industries, and anonymous tip-offs. While there is no fixed frequency, maintaining clean records significantly reduces your risk profile.
Failing a SARS audit can result in several consequences: understatement penalties ranging from 10% to 200% of the tax shortfall (depending on whether the understatement was substantial, reasonable care was taken, or there was intent to evade), interest on outstanding amounts calculated daily at the prescribed rate, and in cases of deliberate fraud, criminal prosecution. Additional penalties apply for obstruction or failure to cooperate during the audit process.
For income tax purposes, you must keep records for 5 years from the date of submission of the return. For VAT records, retain them for 5 years from the date of the last entry. Under the Companies Act, certain records such as accounting records must be kept for 7 years, while founding documents, minutes of meetings, and registers of directors and shareholders must be kept indefinitely. When in doubt, keep records for at least 7 years to cover all requirements.