What to Expect in a CRA SR&ED Review & Common Audit Questions

It’s not a scary audit — here’s what actually happens in an SR&ED review.

A CRA SR&ED review is essentially an audit to confirm your claim meets the program’s criteria. It’s not about catching you out; it’s about verifying that the work you’ve claimed truly qualifies.

💡 Important: If this is your company’s first SR&ED claim, CRA almost always conducts a review. This is normal and doesn’t mean you’ve done anything wrong.

1. The Notice

You’ll first receive a letter or email from the CRA letting you know your claim has been selected for review. This will include:

• The scope of the review (technical, financial, or both)
• The period under review (fiscal year)
• A list of documents you may need to provide

2. The Timeline

• Initial Contact: Usually within weeks of claim submission
• Preparation Window: 2–4 weeks to gather materials
• Review Meeting: Often 1–3 hours (in person or virtual), sometimes split into technical and financial sessions
• Follow-Up: CRA may request clarifications or extra evidence within 1–2 weeks
• Decision: Most resolved in ~3 months; complex cases can take longer

3. The Review Meeting

Who’s in the room:

• CRA Research and Technology Advisor (RTA) for technical review
• CRA Financial Reviewer for cost verification
• Your team: Technical lead, finance lead, and optionally an SR&ED consultant

What they’ll ask:

• Technical: What uncertainty you were solving, why standard methods didn’t work, and what experiments you ran
• Financial: How salaries, materials, and subcontractor costs were tracked and separated from non-eligible work

4. Common CRA SR&ED Review Questions

Technical Review (RTA)

• What was the technological uncertainty you were trying to solve?
• Why couldn’t you use an existing, standard method or tool?
• What hypotheses did you test?
• Can you walk through the experiments you performed and their results?
• What failures or dead-ends did you encounter, and how did they shape your next steps?
• How is your approach different from what is documented in literature or industry best practices?
• What was your starting point and what advancement did you achieve?
• Can you show evidence such as code commits, lab notes, or design revisions?

Financial Review

• How did you track employee time on eligible vs. non-eligible work?
• Can you provide payroll records for claimed salaries?
• How did you determine overhead allocation?
• Do you have invoices and contracts for subcontractors or freelancers?
• Were any government grants (IRAP, MITACS, etc.) used to fund this work, and how were they offset?
• How did you value materials consumed during R&D?
• Can you separate capital equipment from consumables?

5. How to Prepare

• Match stories to evidence: For every experiment, have code commits, lab notes, or design iterations ready
• Be concise: Focus on technological uncertainties and systematic investigation
• Have the right people speak: Engineers/scientists for technical, finance for numbers
• Know your numbers: Be ready to explain cost breakdowns clearly

6. Common Reasons Claims Fail

• No clear technological uncertainty
• Work sounds like routine development
• No documentation to support the claim
• Over-claiming commercial work