Here is a link to the Revenues guide, to whats involved in a Revenue Audit.

In a nutshell, they follow the paper trail, between what is in your annual return compared to the records you have kept for income and expenditure for that year.

Remember you need to keep paper work for 6 years so have it stored some safe…and remember where you left it !!!!

http://www.revenue.ie/en/business/running/keeping-records-revenue-audit.html