Actionable strategies for audit preparation
Released On 11th Feb 2025
The start of a new year presents an ideal opportunity for businesses to undergo an audit and prepare for the year ahead.
Whether it is a legal requirement or a voluntary exercise, an audit can be used to uncover areas for improvement within the company and provide your stakeholders with a greater level of confidence in your numbers as well as demonstrating your commitment to transparency and good governance.
Why your business needs an audit
Mandatory audits apply to listed companies and private businesses that either are part of a group that is not small or meet at least two of the following criteria:
- Turnover exceeding £10.2 million (£15 million from 6 April 2025)
- Assets worth more than £5.1 million (£7.5 million from 6 April 2025)
- A workforce of over 50 employees
However, you do not need to meet these thresholds to benefit from an audit. Some businesses choose to request an audit to gain a clearer view of their financial health.
Strategies for audit preparation
Audit preparation does not have to be overwhelming – if you break it down into actionable steps, it becomes far easier to manage.
Understand the scope of the audit
A good audit will focus on the risk areas of the business. Start by identifying those areas where there is the greatest potential for errors to occur whether through fraud or honest mistakes. Consider what existing controls/ processes you have in place to stop this happening or detect such errors when they do happen.
Regularly review your records
Before the auditor arrives, conduct an internal review of your financial statements and processes. Mapping your existing systems and processes may well identify inefficiencies or areas for improvement even before the audit begins. Make sure you have reconciled all of the balance sheet accounts ahead of the audit and know what makes up these balances.
Organise your documents
Whether physical or digital, keeping your financial records organised is essential.
Tools like Xero or QuickBooks plus add ons are invaluable for businesses looking to automate and streamline their financial processes.
Assign a primary contact
Designate a team member to be the main point of contact during the audit.
This individual will serve as the liaison between your business and the auditor, ensuring smooth communication and quicker responses.
Request your auditor’s checklist early
Auditors typically provide a comprehensive list of required documents, such as forecasts, tax filings, bank statements and contracts.
Be ready for questions
Once you have provided the requested documents, be prepared for follow-up questions.
Partner with experts
When well-prepared, an audit can become an insightful and rewarding process that contributes to business growth.
