Tax and SARS knowledge base
Can SARS request a company's audit working papers?
Can SARS ask a company's auditor for audit working papers, and what are the company's rights?
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Direct answer
Yes. SARS's Guide on Access to Audit Files explains that SARS can request access to a registered auditor's audit files when conducting a tax audit. SARS says it will generally exhaust options to obtain relevant material from the taxpayer directly, but it is not prevented from requesting the same relevant material from the registered auditor.
The guide also describes process safeguards. SARS says it will give the registered auditor written notice under section 46(1), read with section 46(3), of the Tax Administration Act, allow reasonable time to prepare a response, and require senior-official approval for a request for access to audit files.
What this means in practice
Do not confuse the statutory audit with a SARS tax audit. SARS explains that a statutory audit expresses an opinion on financial statements as a whole, while a tax audit considers whether the taxpayer correctly declared its tax position. The fact that an auditor examined financial statements does not eliminate SARS's power to audit tax compliance, and it does not mean all audit-file content is automatically relevant to every tax issue.
A director should treat a request as a formal compliance event. The company, its auditor and advisers need a common understanding of the request, but the auditor has professional duties and controls over its own files. Do not demand that the auditor supply material informally, and do not ask anyone to alter, backdate or recreate records.
The right response is usually organised, factual and documented. Check what SARS has asked for, why it is said to be relevant, which periods and entities are within scope, the deadline and whether a company response can satisfy the request. If there are questions of legal professional privilege, confidentiality, relevance or third-party information, obtain specific advice rather than making a blanket refusal.
Step-by-step
- Preserve the written request.
Save the original request, envelope or electronic header, any audit notification, the deadline and all subsequent correspondence. Record the SARS official, company entity, tax products, years and exact documents or categories sought. Ask for clarity in writing where the scope is genuinely unclear.
- Notify the right people promptly.
Tell the board contact, finance lead, registered auditor and tax adviser. Use a restricted team because audit records may contain confidential business information. Confirm who is authorised to communicate with SARS and who will coordinate the response.
- Create a document map, not a substitute file.
List the relevant company records and, where appropriate, the auditor's file categories. Separate records the company already holds from items held by the auditor. Map each category to the SARS issue and period. This helps identify duplication and gaps without changing the original files.
- Review scope and response obligations.
SARS says a written request for audit files will be made under section 46 and a reasonable period will be granted to prepare a response. Check the legal basis, scope and deadline with advisers. If extra time is required, request it before the deadline with a clear reason and retain proof.
- Produce information in a controlled way.
Keep a production log listing each document, file name, version, date, recipient and delivery method. Provide legible copies in the requested permitted format. Where an issue needs explanation, prepare a separate factual covering schedule that points to the original evidence rather than rewriting it.
- Follow up and maintain confidentiality.
Keep all responses, delivery confirmations and SARS requests in the audit file. SARS notes that current and former SARS employees and persons contracted by SARS have statutory secrecy obligations regarding taxpayer information. That does not remove the need for the company and auditor to handle their own confidential data appropriately.
Documents and records to keep
Keep the request, audit-notice correspondence, response timetable, internal authority record, document index, production log, delivery proof and copies of what was provided. Retain the auditor engagement letter, annual financial statements, tax reconciliations and the records the company supplied to its auditor. Store legal advice separately where appropriate.
Important limits and exceptions
This guide concerns SARS tax-audit requests for audit files. SARS expressly says its access-to-audit-files guidance does not apply to Customs and Excise demands for books, accounts or documents. Different rules and procedures can apply to those matters.
The article does not determine whether a specific document is relevant, privileged or protected from disclosure. Those questions require the written request, the governing legislation and the facts. Section 49(2) of the TAA restricts obstruction or refusal of required access or assistance without just cause, so do not ignore a formal request.
When to get tailored advice
Get tax and legal advice urgently for a broad audit-file request, a request involving several years or group entities, suspected fraud, an unresolved privilege issue, a cross-border matter or a disputed deadline. The registered auditor may also need independent professional advice.
TaxProof can help index company-held records and create a response tracker. We cannot advise on privilege or determine the legal adequacy of a response without reviewing the request and facts.