Let’s be honest—audits don’t have the most exciting reputation.
As the end of the financial year approaches, preparing for your external audit might not be top of your wish list—but it’s a crucial step in ensuring strong governance and reliable reporting. And with the right preparation, it doesn’t have to be stressful.
This short guide outlines practical steps your team can take now to make the process smoother, less disruptive, and far more valuable than its reputation suggests.
Organise Your Financial Records
Ensure that your accounting records are complete, accurate, and up to date. This includes your:
- General Ledger: A comprehensive record of all financial transactions.
- Bank Statements: All statements for the audit period.
- Accounts Receivable and Payable: Detailed aging reports.
- Payroll Records: Including tax filings and superannuation contributions.
- Fixed Asset Register: Documenting acquisitions, disposals, and depreciation.
- Trial Balance: Reconciled and accurate.
- Other Important Documents: Relevant contracts, agreements, minutes of meetings.
Review Internal Controls and Policies
Have your internal controls and financial policies documented and readily available. This might include:
- Authorisation Procedures: How transactions are approved.
- Segregation of Duties: Division of responsibilities to prevent errors or fraud.
- Reconciliation Processes: Methods for verifying account balances.
- Compliance Policies: Adherence to relevant laws and regulations.
- Clear documentation helps auditors understand your processes and identify areas of risk.
Prepare Supporting Documentation
Auditors will request supporting evidence for balances and transactions in your financial statements. Common documents include invoices, receipts, contracts, loan agreements, and minutes of board meetings. Having these organised and easy to access will speed up the audit.
Identify Key Contacts and Roles
Designate staff members who will be the primary points of contact during the audit. Ensure they are familiar with financial systems and records, can provide timely responses to auditor inquiries and can coordinate the collection and delivery of requested documents.
Clear communication helps resolve queries quickly.
Set the Stage for a Smooth Visit
Ensure auditors have access to the systems, files, and workspaces they need, and that key team members are available for discussions. Some disruption to daily operations is inevitable—but early planning helps keep it to a minimum. The more we know, the quicker the audit—so don’t hesitate to say hello, ask questions, or share context. We love a good chat, and it helps us help you.
Anticipate Common Areas of Focus
Auditors often focus on particular areas. Try to anticipate the focus areas and be ready to provide explanations and documentation related to these. Some recent focus areas:
- Revenue Recognition: Ensuring income is accurately reported.
- Asset Valuation: Assessing the accuracy of asset values, in particular any signs or triggers for impairment.
- Liabilities: Identifying and verifying obligations.
- New Transactions: document analysis of appropriate accounting treatment
- Compliance: Adherence to applicable accounting standards and regulations.
Ask Questions
Don’t hesitate to ask your auditor for guidance on preparation. They can provide a tailored list of required documents or highlight any specific concerns based on your business.
Conclusion
A little preparation goes a long way. By taking these steps, you’re setting your organisation up for a smoother audit, fewer surprises, and more valuable outcomes. It’s a win for both your team and your auditors—saving time, reducing stress, and keeping things on track.
If you have any questions or need support as you prepare, we’re here to help.