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5 Common ATO Audit Triggers That You Should Avoid

The last thing you want is for the Australian Tax Office (ATO) to start poking around your business. This is especially true in the case of eCommerce accounting, as the eCommerce industry is fast-paced and any delays to the day-to-day operations can hurt your business. ATO audits are conducted when the ATO system detects signs that someone is cheating on their taxes. However, it is entirely possible to trigger an audit even if you’re handling all your taxes properly. Luckily, there are ways to avoid this.

There are common ATO audit triggers that can be easily avoidable so that you won’t be subjected to unnecessary audits. If you want to know more about this, read on for a list of five common ATO audit triggers that you should avoid.

Financial Performance

The most common trigger for an ATO audit is erratic financial performance. This is usually based on the other companies in your industry. If your company’s performance is drastically different from that of your peers in the same industry, then this may be indicative of a tax issue or unreported cash income.

Not Paying the Right Amount of Superannuation

There are other things that can trigger an audit aside from your business’s financial performance as employee complaints can also cause an ATO audit. This is especially true if your business doesn’t pay the right amount of superannuations to your employees. Paying your superannuations late will also trigger an audit so you’ll want to make sure that you are managing your obligations properly.

Variance Between Tax Returns and Business Activity Statements

You’ll want to be thorough when managing your tax returns and business statements. Any variance between the two can trigger an audit as it can be indicative of anomalous activity. This is especially true when there is a large variance between the information reported in a tax return compared to your business activity statements. Granted, it can be due to an honest mistake but it will trigger an audit regardless of the reason.

Consistent Operating Losses

If your business shows losses in three out of five years, the ATO will automatically audit your business as this can be indicative of a problem. Despite the validity of the losses, if you are in this situation then an audit is sure to follow.

International Transactions

International transactions are a key area of focus for the ATO, which means that any business that deals with international related parties will more likely be subjected to an audit. This is especially true if your business does transactions with tax havens or transfers funds in and out of the country. All of these things are red flags that the ATO is always on the lookout for. If you engage in any of these activities, it would be best to have all your documents in order to prove that there is nothing anomalous going on.


We hope this article proves to be useful when it comes to helping you avoid any issues with the ATO. While audits are necessary, you shouldn’t be subjected to them if you’ve been paying your taxes correctly. For any more questions about this topic, it would be best to speak with a professional accountant.

If you need help with eCommerce accounting, we here at eCommerce Accountant have got your back. We can provide your business with the services that you need to maximize profits. Book a strategy session and start your partnership with us today!

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