Tax return review checklist for Australian accounting firms

Published 16 August 2026. Last reviewed 16 August 2026. Written by Huy Tu, CA. Technically reviewed by James Millar, CPA.

1. Confirm that the file is ready for review

Before reviewing individual tax issues, establish whether the file contains enough information for an effective review. Depending on the client and engagement, consider whether the file contains relevant:

• current-year tax return
• current-year financial statements
• tax reconciliation
• tax calculation workpapers
• general ledger or trial balance information where relevant
• prior-year comparative information
• asset schedules
• loan schedules
• trust distribution documentation where applicable
• dividend and franking records where applicable
• client correspondence relevant to material tax treatments
• supporting calculations for material or unusual items
• file notes explaining significant judgements

The important question is not whether every possible document exists. It is whether the reviewer has sufficient information to assess the matters relevant to the particular file.

2. Confirm the entity and reporting period

Simple identity and period errors can flow through an otherwise technically sound file. Review the consistency of relevant information such as:

• entity name
• ABN and TFN information where appropriate
• entity type
• income year
• directors
• shareholders
• trustees
• beneficiaries or other relevant parties
• ownership information where relevant
• business activity
• return type
• signing or public-officer information where applicable

Significant changes from the prior year should be understood rather than simply carried forward.

3. Cross-check major financial figures

Review the relationship between the financial statements, tax return and tax workpapers. Depending on the entity and file, consider:

• total income
• accounting profit
• taxable income
• income tax expense
• tax payable
• wages and salary expense
• contractor expense
• interest income and expense
• dividends
• loans and related-party balances
• depreciation
• capital gains
• provisions
• significant balance-sheet movements

A difference does not automatically indicate an error. The purpose of review is to identify differences and determine whether the reason is understood and appropriately supported.

4. Review the tax reconciliation

The tax reconciliation connects accounting profit with taxable income and can be one of the central review documents in a business tax file. Consider whether:

• accounting profit agrees with the financial statements
• permanent differences have been identified
• temporary differences have been considered where relevant
• non-deductible expenditure has been appropriately treated
• assessable income not recognised in accounting profit has been considered
• tax depreciation adjustments are supported
• capital and revenue items have been appropriately distinguished
• prior-year adjustments have been appropriately dealt with
• taxable income agrees with the tax return
• the tax calculation reconciles with the amount disclosed

A reconciliation can mathematically add up while still containing an incorrect classification. The reviewer therefore needs to assess both the arithmetic and the underlying treatment.

5. Investigate material or unexpected movements

A year-on-year comparison can quickly identify areas that may require further investigation. Depending on the taxpayer, consider material or unexpected changes in:

• revenue
• gross margin
• wages
• subcontractor costs
• motor vehicle expenses
• interest
• rent
• repairs and maintenance
• legal and consulting costs
• director or shareholder loans
• distributions
• dividends
• debtors
• creditors
• fixed assets
• tax payable
• provisions

A movement does not itself establish that anything is wrong. It identifies an area where an additional question may be worthwhile.

6. Review related-party transactions

Related-party balances deserve particular attention because their accounting description may not reveal their tax significance. Depending on the entity, consider:

• shareholder loans
• director loans
• loans involving associates
• related trusts
• intercompany accounts
• management fees
• rent
• interest
• dividends
• distributions
• private expenditure paid by an entity
• use of entity assets by shareholders or associates

Check whether the same transaction is described consistently across the financial statements, tax return and workpapers.

Where a private company has provided a payment, loan or other relevant benefit involving a shareholder or associate, consider whether Division 7A requires further review. See our Division 7A review checklist.

7. Review entity-specific tax issues

Not every checklist item applies to every taxpayer. The reviewer should identify the issues created by the entity type and the client's circumstances.

Companies

Depending on the circumstances, consider matters including:

• Division 7A
• base rate entity treatment
• franking
• tax losses
• capital gains
• tax reconciliation
• related-party balances
• dividends
• shareholder transactions

Trusts

Depending on the circumstances, consider:

• trust income
• distribution resolutions
• beneficiary entitlements
• streaming
• trustee documentation
• Section 100A considerations
• private-company beneficiary issues
• related-party transactions

Individuals

Depending on the circumstances, consider:

• capital gains
• rental property matters
• work-related deductions
• investment income
• foreign income
• personal services income
• business income and deductions

Business entities generally

Depending on the circumstances, consider:

• depreciation
• trading stock
• prepayments
• capital allowances
• CGT events
• losses
• private use
• payroll-related matters
• related-party transactions

The objective is not to create the longest possible universal checklist. It is to identify the areas genuinely relevant to the particular file.

8. Review disclosures against supporting information

A tax return label should not necessarily be reviewed in isolation. Where material, consider whether return disclosures agree with relevant:

• financial statement classifications
• tax workpapers
• schedules
• elections
• resolutions
• calculations
• source documents
• correspondence
• prior-year treatment

Where information appears in only one place, consider whether supporting or corroborating material would ordinarily be expected.

9. Consider information that appears to be missing

A reviewer should pay attention not only to what the file contains but also to information that might reasonably be expected and cannot be located. Examples may include:

• a calculation referred to by another workpaper
• supporting documentation for a material adjustment
• evidence explaining a related-party balance
• a trust resolution
• a loan agreement
• a franking account calculation
• an asset schedule
• documentation supporting an unusual tax treatment

"Not found" does not mean "incorrect". It means the reviewer may need to determine whether additional evidence or enquiry is required.

10. Consider whether further enquiries are required

A good review often produces questions. Examples may include:

• Why did this balance move materially?
• What does this related-party account represent?
• Is there supporting documentation?
• Has the relevant client fact been confirmed?
• Why does this year's treatment differ from the previous year?
• Is an election, agreement or resolution relevant?
• Is additional technical research required?
• Does the workpaper explain the conclusion adequately?

The reviewer should pursue incomplete or unclear information where necessary to reach an appropriate professional conclusion.

11. Review calculations that support material tax outcomes

Where a material tax outcome depends on a calculation, the reviewer should ensure that the calculation is present, supported and appropriately checked. Depending on the file, this could include:

• taxable income calculations
• depreciation
• capital gains
• losses
• franking
• trust distributions
• tax reconciliation
• private-company loan calculations
• other entity-specific tax calculations

Tax QA software may help identify whether relevant workpapers appear to be present and whether information is consistent across the submitted file. The registered tax practitioner remains responsible for performing or verifying calculations and determining the appropriate tax treatment.

12. Document the reviewer's conclusion

A review process should leave evidence of how significant matters were resolved. Depending on the firm's procedures, the file may record:

• matters reviewed
• questions raised
• additional evidence obtained
• adjustments requested
• technical references considered
• matters discussed with the client
• matters referred to another practitioner or specialist
• unresolved issues
• the reviewer's conclusion

The value of a review note is not necessarily its length. The important issue is whether another suitably experienced practitioner could understand the significant matters identified and how they were dealt with.

Where tax QA software can assist

A checklist reminds the reviewer which questions to ask. Tax QA software can assist with some of the mechanical work behind those questions.

Taxpartna analyses the submitted tax file, identifies and connects information across documents, performs defined cross-checks and surfaces potential issues for practitioner assessment. For example, rather than simply asking a reviewer to confirm that figures agree, the software may locate relevant figures across multiple submitted documents and present the comparison and source information. The practitioner still determines whether the result is appropriate.

Learn more about tax QA software for Australian accounting firms.

Build the review around the file, not the checklist

The purpose of a tax return review checklist is not to create the longest possible list. It is to make important review procedures more systematic while leaving room for professional judgement.

A straightforward file may require relatively few additional enquiries. A complex group, unusual transaction or poorly documented file may require considerably more. The checklist provides structure. The practitioner determines the depth of review required.

Related resources

• Tax QA software for Australian accounting firms
• Tax quality assurance sign-off
• Division 7A review checklist
• Taxpartna review features

Important information. This guide provides general information about reviewing tax files in Australian accounting practices. It is not a prescribed review procedure and does not constitute tax, legal or professional advice. The appropriate review process depends on the client, engagement, circumstances and professional judgement of the registered tax practitioner.