Audit Risk Assessment

Answer honestly. The score is most useful when based on actual practice, not aspirational practice.

1. 1. Do you run personal expenses through the business?

   Personal travel, meals, vehicle, household items paid by the business.

   NeverOccasionally — always reimbursedSometimesYes — for tax savings

2. 2. Do you have W-9s on file for every 1099 contractor paid $600+?

   Yes, every oneMostSome are missingDon't really track

3. 3. If S-corp: how does your salary compare to industry benchmarks?

   If not S-corp, pick 'N/A'.

   N/A — not an S-corpAt or above benchmark with documentationSlightly below benchmarkWell below benchmark (more in distributions)

4. 4. Do business expense amounts show as round numbers?

   Round $1,000 meals, $5,000 vehicle, etc. signal estimation rather than documentation.

   Always from documented amountsMostly documented, some estimatesRound numbers throughout

5. 5. How much of your business is cash collections?

   Cash businesses face heightened scrutiny.

   None / minimalSome cash with daily POS reconciliationSignificant cash, daily controls in placeSignificant cash, informal tracking

6. 6. If you sell across state lines: are you registered for sales tax where you have nexus?

   Marketplace facilitator collection still requires registration in many states.

   N/A — no out-of-state salesYes, registered everywhere we have nexusSome states, not allNot registered anywhere

7. 7. Are your books closed monthly with reconciliations?

   Yes — monthly close on scheduleQuarterly closeAnnual at tax timeNo regular cadence