6 worked Due-Diligence Accounting Support case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to due-diligence accounting support work, not a specific client's file.
Case Study 1 · Sale and succession
$220,000 Sheltered By The Lifetime Capital Gains Exemption — Subscription Business, London
Client: A subscription business tracking churn · Where: London, Ontario · Engagement: 10 weeks, fixed fee
Gain sheltered$220,000
ClosingOn schedule
Share qualificationMet
The situation — A subscription business tracking churn, London, Ontario
A subscription business tracking churn in London, Ontario had an offer on the table and 17 months to close. The shares did not qualify for the capital gains exemption. A single shareholder holding every share, with no room to multiply the exemption was part of the reason.
What we did for A subscription business tracking churn, London, Ontario
We purified the corporation so the shares met the qualifying tests. We rebuilt the reporting around gross margin by service line, which showed two of five offerings were losing money at the current price. All of it was done well ahead of the closing date.
The result — A subscription business tracking churn, London, Ontario
The sale closed on schedule with $220,000 sheltered by the lifetime capital gains exemption across the shareholders.
Client: A corporation approaching a covenant test date · Where: Lethbridge, Alberta · Engagement: 6 weeks, fixed fee
Penalty cancelled$112,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A corporation approaching a covenant test date, Lethbridge, Alberta
A corporation approaching a covenant test date in Lethbridge, Alberta had already missed one deadline and was about to miss a second. Behind it sat a healthy bank balance made up almost entirely of deposits for work not yet performed. A penalty of $112,000 was accruing.
What we did for A corporation approaching a covenant test date, Lethbridge, Alberta
We split the work into what had to happen before the deadline and what could follow it. Then we set a quarterly tax provision, so the instalments and the year-end balance were funded before they came due.
The result — A corporation approaching a covenant test date, Lethbridge, Alberta
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $112,000 of the penalty already assessed on the earlier year.
Case Study 3 · Scaling without breaking
Scaled To 22 Staff With $95,000 Of Working Capital Freed — Second-Province Distributor, Burnaby
Client: A distributor entering a second province · Where: Burnaby, British Columbia · Engagement: 4 weeks, fixed fee
Headcount reached22
Working capital freed$95,000
Missed deadlinesZero
The situation — A distributor entering a second province, Burnaby, British Columbia
A distributor entering a second province in Burnaby, British Columbia was growing fast, with headcount reaching 22 in eighteen months. The back office had not kept up. A covenant breach discovered only when the bank called was the first thing to break.
What we did for A distributor entering a second province, Burnaby, British Columbia
We traced each borrowing to what it actually funded and kept the interest deduction on the portion used to earn business income. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A distributor entering a second province, Burnaby, British Columbia
The business reached 22 staff with no missed remittance and no late filing. $95,000 of working capital was freed in the process.
Case Study 4 · Backlog brought current
$35,000 Of Arbitrary Assessments Vacated After 4 Years — First Finance Hire, Toronto
Client: A company hiring its first finance staff · Where: Toronto, Ontario · Engagement: 8 weeks, fixed fee
Arbitrary tax vacated$35,000
Years brought current4
Account statusCurrent
The situation — A company hiring its first finance staff, Toronto, Ontario
4 years of unfiled returns had turned into notional assessments at a company hiring its first finance staff in Toronto, Ontario. Underneath lay a borrowing drawn for an unrelated personal purchase with the interest claimed against the business. Collections had already started.
What we did for A company hiring its first finance staff, Toronto, Ontario
We produced a board-ready monthly package — cash, margin, pipeline and covenant headroom — that replaced a spreadsheet nobody trusted. We then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — A company hiring its first finance staff, Toronto, Ontario
All 4 years were accepted as filed. $35,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 4 years.
Case Study 5 · Records and systems rebuilt
Books Rebuilt From Source, $19,000 In Unclaimed Input Tax Found — Acquiring Clinic Group, Brampton
Client: A clinic group acquiring a competitor · Where: Brampton, Ontario · Engagement: 6 weeks, fixed fee
Unclaimed tax found$19,000
Records rebuilt9 months
ProcessDocumented
The situation — A clinic group acquiring a competitor, Brampton, Ontario
A clinic group acquiring a competitor in Brampton, Ontario could not answer basic questions about its own numbers. An owner making hiring decisions on last quarter’s bank balance sat between the bank statements and the ledger.
What we did for A clinic group acquiring a competitor, Brampton, Ontario
We modelled the covenant ratios monthly and restructured the debt before the next test date rather than after it. We then documented the process so the work does not depend on any one person remembering how it was done.
The result — A clinic group acquiring a competitor, Brampton, Ontario
Records rebuilt and reconciled, $19,000 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 6 · CRA review defended
$12,000 Proposed Adjustment Withdrawn In Full — Mid-Sized Services Firm, Calgary
Client: A mid-sized professional services firm · Where: Calgary, Alberta · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$12,000
File closed in7 weeks
Penalties assessedNone
The situation — A mid-sized professional services firm, Calgary, Alberta
A mid-sized professional services firm in Calgary, Alberta received a proposal letter opening a review of due-diligence accounting support. The CRA had identified a monthly report that stopped at the income statement, with no balance sheet and no cash view. It proposed an adjustment of $12,000, with 30 days to respond.
What we did for A mid-sized professional services firm, Calgary, Alberta
We treated the response as an evidence exercise rather than an argument. We built a rolling thirteen-week cash-flow model, tightened collections, and renegotiated supplier terms so the growth stopped consuming the bank balance. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A mid-sized professional services firm, Calgary, Alberta
The proposed adjustment was withdrawn in full — all $12,000 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
