Senior finance execs and tax directors come in for a scolding in a new KPMG survey which finds that more than 40 percent of companies haven’t bothered to set up a formal policy or procedure to manage the exam process in case the IRS comes knocking on, or battering down, the door. This despite the fact that audit activity is definitely on the rise.

Nearly half of the businesses polled by the Big 4 firm say that they’re experiencing higher levels of involvement in IRS audit activity than they were 2 years ago.

Most corporate taxpayers (72 percent) at least check through their returns to identify potential issues. But they need to go a lot further than that, according to Sharon Katz-Pearlman, principal-in-charge of KPMG’s tax controversy services practice. She suggests reviewing accounting methods, designating a single point of contact with the agency, developing information-gathering processes, and about a half-dozen other things that you probably don’t have time or resources for right now.

KPMG’s press release for the study is here. ###