Preparing your company for an Audit

A business owner or finance function may get nervous about an audit. After all, audits are crucial (not to mention mandatory) for qualifying companies’ financial health and regulatory compliance.

However, an audit should be considered an opportunity, not just an examination, and proactive preparation underpinned by sound business practices can ensure your company is well prepared for its audit.

Understand your current position

The first step for any company due to be audited (whether a statutory audit or a voluntary strategic audit) is to assess its current financial and operational standing. This can help you understand your key risk areas and how well you comply with regulations.

Carefully reviewing your financial records and evaluating your internal processes can go a long way to helping your auditor deliver their findings more quickly, with fewer queries and reports throughout.

Get your documents organised

Well-organised documents for operational and financial efficiency are a no-brainer; however, they can also help you in audit preparation. Properly filing and categorising your documents, creating a centralised system, and implementing effective version control are just a few ways you can contribute to a streamlined audit process, which saves you and the auditor time and minimises the chances of errors happening and, therefore,, reduces the need for follow up audit work.

Train and prepare your team

Your team will need to work with your auditors as part of the audit process, whether answering queries about finances and operations or providing required documentation. Keeping your team well informed of the audit process and expectations is a great way to make them an asset to the audit. An excellent way to prepare your staff for an audit is to conduct mock audits simulating real scenarios and proactively address any potential issues.

Allocate sufficient resources

Being audited requires an additional time commitment from your staff on top of their day-to-day job. Ensuring that you’ve planned in advance will ensure that your staff have appropriate time to deal with any audit queries and ensure that the audit runs as efficiently as possible.

Leverage available technology

Technology isn’t just for large corporations – using the latest tools and software can help businesses of all sizes improve their audit readiness. Integrated accounting and operational platforms like Xero can track financial activity, store and organise documents, automate essential processes, store and process crucial data, and improve data security – all critical factors when an audit is due.

Communicate effectively

Effective communication throughout your entire team is essential, not just for audit preparation. By optimising your internal communications, maintaining transparency with stakeholders, and having an open communications line with your auditor based on partnership, you can help ensure your audit goes more smoothly. It is also wise to have a clear strategy for handling media and public relations should there be any findings from the audit.

Prioritise continuous improvement

A clear focus on continuous improvement should be a keystone of your business strategy, not just a priority when an audit is due. However, putting good habits in place and working to gradually and consistently improve your financial and operational health all year round will positively affect your audit experience.

Conclusion

A well-prepared company is much more likely to navigate its audits successfully. By adopting a proactive approach, organising your documentation well, training staff, integrating technology, and focusing on communication, your company can get the audit results you are looking for and harness its potential for operational improvements.

Why work with Shorts? An audit is not just a box-checking exercise but a real strategic business opportunity for companies that use it to its full potential. A Shorts Audit is built around the joined-up ethos of the wider Shorts team, which means your audit also reveals opportunities in areas like tax planning, mergers and acquisitions, management accounts, R&D tax reliefs, and even the personal taxation of company owners. Speak to the Shorts Audit team today if you would like to learn more.