How to prepare for an audit

Preparing for an audit is already a time-consuming task and this is only increased during uncertain times. For those companies that need to submit their accounts from the previous year during a period of unease, there are still options available to help you prepare. Having your audit due during an uncertain time can add additional pressures to businesses. However, audits are still able to take place remotely. By using secure IT platforms for file sharing as well as software such as Microsoft teams and zoom, video conferencing is now easier so that auditors and their clients can remain in touch through the entire process.

Ask your auditor for information required

Ask your auditor for a list of all the information they require to undertake the audit. Ensure you ask for this well in advance in case of any delays accessing the information.

Prepare accounts in advance

Have accounts prepared at least one week in advance before the audit is due. This allows auditors time to plan their work accordingly so that they can focus on key areas. You or your accountant should be able to generate these documents before the audit.

Discuss any potential issues with Auditors

Although the majority of the audit can easily happen remotely, there are times where this can cause problems. For example, stock takes and other physical observations such as verification of assets. It is important to discuss these in advance with your auditor. For example, there may be a way of conducting some of these physical checks via conference call. Alternatively, if the stock will not change due to a business currently not operating, then this element of the check may be able to be postponed.

Have correct IT systems in place for file sharing

Ensure you have the IT system in place to allow the easy yet secure sharing of files with your auditor.

Provide the correct documentation promptly

You need to ensure that you can obtain and provide your auditor with financial statements and other vital information that they will need to complete the job. If there will be delays in obtaining this information, discuss immediately with your auditors.

Review your finances

If possible, review your own financial information in advance. This is common good practice, regardless of whether the audit is taking place during an uncertain time or not. As a business owner, the financials should make sense to you. Prepare notes to go alongside the accounts to help the auditors. If your understanding of the business’ financial position is strong, you will be able to accurately answer any queries the auditor may have

Going concern decision

This is part of the audit where it is decided whether the company in question has the resources they need to stay afloat and avoid bankruptcy during the following year. This is a difficult decision for auditors to make during uncertain times. In order to help make this decision, companies should be analysing their cash flow and trying to make it as strong as possible. This is where the importance of having a strong cash flow management plan in place kicks in. Audits are inevitable, even during uncertain times, so it is something you cannot avoid or ignore. However, by preparing as much as possible and communicating regularly with your accountants and auditors, you will be in a better position to tackle it. If you are concerned about preparing for audits or need any additional advice then please speak to one of our team. Wright Vigar are here to help you. Contact a member of the Wright Vigar team on website@wrightvigar.co.uk