The sixty-second answer
A CRA auditor can inspect any document that may relate to your obligations under the Income Tax Act, and can enter premises where your business is carried on or your records are kept. The one hard limit is a dwelling-house, which needs your consent or a judge's warrant. Against that, you carry a legal duty to give all reasonable assistance and answer proper questions, in person, by video-conference or in writing. Records must be kept six years, and electronic ones must stay electronically readable.
The scope is defined by relevance, not by ownership
Most owners picture an audit as a request for a specific year's receipts. The legislation is considerably wider than that. Section 231.1 permits the inspection, audit or examination of documents, including books and records, of a taxpayer or of any other person, where those documents may relate to obligations or entitlements under the Act [1].
Two things in that sentence do real work. The first is "may relate", which is a relevance test rather than a certainty test. The second is "any other person", which means the reach is not confined to documents in your own filing cabinet. Records held by a supplier, a customer or a related company can be inspected where they bear on your position.
The same provision also extends beyond documents entirely, to the examination of property or a process, or any matter relating to a taxpayer, where it may assist in determining obligations or entitlements [1].
Where an auditor may go
Section 231.1 permits entry to any premises or place where a business is carried on, where property is kept, where anything is done in connection with a business, or where books or records are or should be kept [1].
That last clause is worth reading twice. It is not limited to where records are kept. It includes where they should be kept, which folds in the obligation under subsection 230(1) to keep records at a place of business or residence in Canada [2].
The dwelling-house limit is real, and it is narrow
There is one genuine boundary. Where the premises is a dwelling-house, an authorized person cannot enter without the occupant's consent unless a warrant has been issued under subsection 231.1(3) [1].
The warrant is available on an ex parte application, and a judge may grant it on being satisfied of three things: that there are reasonable grounds to believe the place is a dwelling-house, that entry is necessary for a purpose relating to administration or enforcement of the Act, and that entry has been refused or there are reasonable grounds to believe it will be [1].
The interesting part is what happens when the judge is not satisfied that entry is necessary. Rather than simply refusing, the judge may order the occupant to provide reasonable access to any document or property, and make any other order appropriate to carrying out the purposes of the Act [1]. In other words, declining entry does not put the documents beyond reach. It changes the mechanism, not the outcome.
The practical consequence for a home-based business is that the records themselves are reachable regardless. The limit protects the premises, not the paperwork.
The duty to assist is an obligation, not a courtesy
This is the part owners most often misread. Paragraphs 231.1(1)(d) and (e) require a taxpayer, or any other person, to give all reasonable assistance and to answer all proper questions relating to the administration or enforcement of the Act [1].
Since amendments made in 2022, that duty explicitly includes attending in person at a place designated by the authorized person, or appearing by video-conference or another form of electronic communication, to answer questions orally. It also includes answering questions in writing, in any form the authorized person specifies [1].
The qualifier throughout is "proper". Questions must relate to administration or enforcement of the Act. That is a boundary, but it is a boundary around subject matter rather than around convenience.
Six years, and readable
The retention rule is the one most likely to cause a problem years after the fact. Subsection 230(4)(b) requires records and books of account, together with every account and voucher necessary to verify the information they contain, to be kept until six years from the end of the last taxation year to which they relate [2].
Note the phrase "every account and voucher necessary to verify". The obligation is not satisfied by keeping the summary. It extends to the underlying documents that prove the summary.
Where no return was filed for a year, the clock does not start at the year end at all. Subsection 230(5) runs the six years from the day the return for that year is actually filed [2]. A year you never filed is therefore a year whose retention period has not yet begun.
Two further points. Subsection 230(4.1) requires electronic records to be retained in an electronically readable format for the same period [2], which is a higher bar than merely having the file. And subsection 230(8) permits disposal before the period expires only with the Minister's written permission [2].
There is also a trap on the back end. Subsection 230(6) requires records to be retained where an objection or a Tax Court appeal is outstanding, until appeal rights lapse or the matter is disposed of [2]. Disputing an assessment extends your retention obligation rather than ending it.
Why retrieval matters more than storage
An audit rarely fails on whether a business kept its records. It fails on whether the business can produce the specific document behind a specific number, within the time the auditor allows, several years after anyone remembers the transaction.
That is a retrieval problem dressed up as a storage problem. A box of receipts satisfies subsection 230(1) and is close to useless under a document request that names a supplier and a quarter.
This is the part MapleTax leans on rather than solves in isolation. Because the return is assembled from receipts already captured in MapleExpense and invoices already issued through MapleInvoice, the line on the return and the document behind it stay connected. A request for support for a specific figure is then a lookup rather than an excavation.
Disagreeing is a defined process, with a clock
An audit ends in an assessment or reassessment. If you disagree, section 165 provides for a written notice of objection setting out the reasons and all relevant facts, after which the Minister must reconsider and either confirm, vary or reassess, and notify you in writing [3].
The deadlines are specific and they differ by taxpayer, which is a subject in its own right. The point to carry out of an audit is simply that disagreement has a defined route and a defined window, and that neither survives being ignored.