If your business is facing its first statutory audit, the process can feel overwhelming. But with the right preparation, it doesn’t have to be. Here’s a practical guide to help you get audit-ready.
Why Preparation Matters
A well-prepared audit runs faster, costs less, and produces fewer surprises. When your records are organised and your team knows what to expect, auditors can do their work efficiently — which means less disruption to your business and a lower audit fee.
The Preparation Checklist
1. Get Your Books in Order
Before the auditors arrive, make sure your accounting records are complete and up to date. This means:
- All bank accounts are reconciled through the audit period
- Accounts receivable and payable are accurate and aged
- Fixed asset register is current with all additions and disposals
- Intercompany balances (if any) are reconciled
- All journal entries are properly documented
2. Prepare Your Supporting Documents
Auditors will request documentation to verify your financial statements. Have these ready:
- Bank statements for all accounts (full year)
- Trade licence and registration documents
- Lease agreements and contracts
- Loan agreements and facility letters
- Insurance policies
- Board resolutions and meeting minutes
- Shareholder agreements
- VAT returns filed during the period
3. Review Your Revenue Recognition
Revenue is one of the most scrutinised areas in any audit. Make sure you can clearly demonstrate:
- When revenue is recognised and why
- That your policy is consistent with IFRS 15
- That you have supporting contracts or invoices for all revenue recorded
- That any deferred revenue is properly accounted for
4. Reconcile Your Payroll
Payroll is another area auditors examine closely. Ensure:
- All employee records are complete and current
- End-of-service benefit provisions are calculated correctly
- WPS records match your payroll records
- Any employee loans or advances are documented
5. Document Your Estimates and Judgements
If your financial statements include estimates — such as provisions for bad debts, useful life of assets, or impairment assessments — be prepared to explain the basis for these judgements. Auditors will want to understand your methodology and test its reasonableness.
6. Prepare a Trial Balance and Draft Financial Statements
If possible, prepare draft financial statements before the audit begins. This gives the auditors a starting point and helps identify any obvious issues early.
Common Mistakes to Avoid
- Waiting until the last minute to start preparation
- Not assigning a point person to manage the audit process
- Failing to reconcile intercompany balances
- Missing or incomplete supporting documents
- Not communicating with your auditor before fieldwork begins
How Bayswater Financials Can Help
If this is your first audit and you’re not sure where to start, our team can help you prepare. We offer pre-audit readiness reviews that identify gaps in your records and help you get organised before the auditors arrive.
The goal is simple: a clean audit with no surprises.