The word “audit” means different things depending on who’s asking. For most small business owners, the concern is an IRS audit and what it costs to have someone represent you. Less commonly, it’s a financial statement audit required by a bank, investor, or grant provider.

IRS audit representation typically costs $2,000 to $10,000 for small businesses. Simple correspondence audits where the IRS questions a few line items might run $500 to $2,000. Office audits where you sit down with an examiner to review specific areas of your return cost $2,000 to $5,000. Field audits where an agent comes to your business and examines records on-site can run $5,000 to $15,000 or more depending on how long the examination takes and what issues come up.

The cost depends heavily on how organized your records are. If an examiner requests documentation and you can produce it quickly, the audit moves faster and costs less. If your books are a mess and the IRS finds problems that lead to additional years being examined, the cost goes up significantly. Clean bookkeeping throughout the year is cheaper than scrambling to reconstruct records during an audit.

You shouldn’t be talking directly to an IRS examiner without professional help. Saying the wrong thing or providing documents the IRS didn’t ask for can turn a simple inquiry into a much bigger problem. A professional handles communications, gathers documentation strategically, and represents you at meetings so you don’t have to sit across from an examiner trying to explain your tax return.

Financial statement audits are completely different. These are formal examinations by a CPA firm that result in an auditor’s opinion on whether your financial statements are accurate. Banks sometimes require them for large loans. Investors, bonding companies, or government grant providers may require them as well.

A financial statement audit for a small business typically costs $5,000 to $20,000 annually. The price depends on your revenue, number of transactions, and industry complexity. A straightforward service business costs less to audit than a contractor with work-in-progress accounting or a retailer managing significant inventory.

Most small businesses don’t actually need formal financial statement audits. A review or compilation provides a lower level of assurance and costs considerably less. Your accountant can advise whether an audit is actually required or whether your lender will accept something less expensive.

The cheapest audit is the one that never happens. Accurate tax returns, proper documentation, and books that tie out correctly reduce the chance of IRS attention. Working with a Queen Creek area enrolled agent who understands your business means fewer errors that trigger audits in the first place. Prevention costs a fraction of what representation costs after problems surface.