How to prepare your business for an audit

Posted 1 Mar

How to prepare your business for an audit

Getting ready for an audit is unlikely to be one of your favourite things to do as a business owner. But being prepared, organised and ready can take some of the pain out of an audit.

Planning for your audit helps your auditor get their job done more quickly, and it also means there’s minimal disruption to your staff and business during the process.

Let's take a look at five keyways to be ready for an audit.

Carrying out an audit of your business finances is a mandatory requirement for many companies. The rules and regulations will vary depending on the territory you trade in, but once you’re over a certain threshold for turnover or number of employees, an audit is likely to become a legal requirement. So, what can you do to make this process less of a hassle?

In advance of the audit date, be sure to:

1. Gather all the relevant documentation – this documentation will include financial statements, bank statements, expenses, management information and any other documentation that your auditor is likely to ask you for.

2. Organise your documentation in a logical way – the whole audit will be far easier to complete if your financial data and documentation is well-organised. Make it simple for the auditors to find what they need and ensure there’s easy access to all information.

3. Identify any potential financial issues – the last thing you want is a giant problem coming up in the middle of your audit. So, it’s a good idea to check for any financial issues or irregularities that the auditor may flag up. Doing this well in advance gives you enough time to address any issues and resolve them before the audit begins.

4. Be prepared to answer questions – it’s likely your auditor will want to ask some probing questions about your business and financial records. Make sure you’re up to speed with your accounts and be prepared to answer these questions honestly.

5. Cooperate with your auditor – the auditor’s job is to ensure that your financial statements are accurate and that your business is in compliance with all applicable regulations. This will be much easier to do if you cooperate with them, answer their questions with good grace and quickly provide them with any information they need.

Talk to us about getting audit-ready

If you’re thinking that your company finances might not be quite ‘audit-ready’, you’re definitely not alone. Many businesses are not quite as organised with their financial management as they’d like to be. But don’t worry, help is at hand!

If you’d like some assistance with reviewing the health and organisation of your financial processes, we can help you get in control of your finance. Get in touch with your WDF team member today on 02 6921 5444 to review your financial management.

WDF Accounting and Advisory | Accountants Wagga | Your partners in business

Providing carefully tailored accounting solutions in business advisory, tax compliance, bookkeeping, Self-Managed Super funds, and more.