You will want to prepare your financial statements in accordance with an accounting framework that's appropriate for your business. Most of the time, you'll opt for a CPA to produce your financial statements. Getting an accountant's blessing is especially useful when you are applying for more credit from a bank.
You may be surprised to learn that not every audit notification you receive will be legitimate. So, first, make sure you received an official audit notification. The Internal Revenue Service (IRS) will notify you either by letter or by a phone call followed by a letter. The IRS does notnotify taxpayers about audits through email, so if you do get an email saying you've been selected for an audit, it's probably fraudulent. If you've determined that you're definitely getting audited, your next step is to learn what's involved.
The IRS will assure you that you've been randomly selected for closer examination. You may feel totally unhinged, like you are entering Dante's Inferno. For one Manhattan man, the letter about the audit was the opening act of a five-month-long drama.
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