CCRA Position on the Standard Audit File (SAF)

[sandyfoote@footeworks.ca]

Standard Audit File (SAF) Applicability to CCRA

The CCRA is very interested in the adoption of the OECD SAF in Canada.  The SAF makes it easier for businesses to meet their record keeping obligations and also make it easier for tax authorities to verify electronic transactions, especially with small and medium enterprises. While the SAF could be produced in one of the common, non-proprietary or “open” data interchange format, it is expected that the XML would become one of the more popular, frequently used format.

Over the past number of years, the use of accounting and business software has increased dramatically. However inadequate attention has been paid to access as well as reliability of financial information created and processed by these systems. Both CCRA auditors and the taxpayers are forced to spend resources to extract and reformat business records in order to access, review and verify business transactions. The proposed SAF and related software developer guidance is expected to reduce the compliance burden on taxpayers and verification burden on tax auditors.

CCRA recognizes that the incorporation of export capabilities in business software will simplify and reduce the cost and time taken to audit business transactions. The benefit will be the avoidance of time-consuming work and will optimize the tasks related to tracing business transactions to the tax return. 

The work underway at the OECD level will ensure accounting software is able to create, upon request, a file of ALL transactions in a common data interchange format – XML, CSV, etc.

This works also with the related issue of reliability and internal control/audit trails.  Thus making sure that the system that created, recorded and retained business transactions follows certain basic reliability and integrity requirements.