Compliance

CRA Audit Readiness: What Triggers a Review and How to Prepare

CRA reviews a percentage of SR&ED claims every year. Understanding what triggers scrutiny and how to prepare your documentation can mean the difference between approval and reduction.

Marcus Webb · Editorial Lead 2026-05-10 5 min read

Why CRA reviews some claims and not others

CRA uses risk-based selection for SR&ED reviews. Claims with unusually high expenditure ratios, first-time filers in new industries, or projects described in vague language are more likely to be selected. The review rate varies by industry and claim size, but every claim has some probability of review.

The key insight: audit risk is not random. It's predictable. Claims that are well-documented, clearly described, and proportionate to the company's size and industry face lower scrutiny. Claims that read as exaggerated, vague, or inconsistent with the company's public profile face more.

What CRA reviewers actually look for

  1. Does the narrative match the supporting evidence? (Git commits, design docs, sprint records, testing logs)
  2. Are the described technological advancements plausible given the company's stage and capabilities?
  3. Is the time allocation reasonable and consistent with payroll records?
  4. Did the systematic investigation follow a logical process — hypotheses, experiments, results?
  5. Are the claimed expenditures properly supported with invoices, contracts, and allocation records?

Preparing for a potential review

The best audit preparation happens during claim preparation, not after filing. Every narrative should reference specific evidence that you can produce if asked. Every time allocation should have a defensible basis. Every expenditure should have a clear paper trail.

Audit-ready narrative excerpt

'We developed a custom caching layer because existing solutions (Redis, Memcached) couldn't handle our write-heavy workload with sub-10ms consistency requirements. We prototyped three approaches — write-through, write-behind with conflict resolution, and partitioned invalidation — and benchmarked each against our production traffic patterns. The partitioned invalidation approach met our latency requirements but introduced consistency windows we had to resolve through version vectors. This work is documented in sprint retrospectives (Sprints 34–37), architecture decision records (ADR-042, ADR-047), and load test reports (load-test-2026-q1).'

CRA audit compliance documentation

Turn this guide into a claim package

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