Preparing for your annual audit: a practical checklist

An audit runs on evidence. When balances are reconciled and documents are ready, auditors spend their time on judgement and risk instead of chasing paperwork. The following checklist reflects what we see most often in well-prepared companies.

Six to eight weeks before year-end

• Agree the audit timetable, key dates and the people responsible on your side.
• Review significant transactions of the year: new contracts, loans, acquisitions and disposals.
• Plan the inventory count and the fixed asset verification.
• Identify accounting judgements that will need support, such as provisions and impairment.

At year-end

• Reconcile bank accounts, loans, receivables and payables with external confirmations where possible.
• Complete cut-off procedures for sales, purchases and inventory.
• Document the inventory count and investigate differences promptly.

Before fieldwork begins

• Prepare a trial balance that agrees with the general ledger.
• Compile supporting schedules for every significant balance.
• Collect contracts, board decisions and correspondence on legal matters.
• Prepare short explanations for significant movements compared with the prior year.

During the audit

Nominate one coordinator who tracks requests and answers. Respond to findings as they arise rather than at the end, and discuss proposed adjustments with the audit team as soon as they are identified.

After the audit

The management letter is the most useful part of the audit for the following year. Assign an owner and a deadline to each recommendation, and review progress before the next audit starts.

This article provides general guidance and does not constitute professional advice for a specific situation.