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Financial Audit Preparation Checklist

During your financial audit, the auditor will check that your businesses financial statements are represented accurately and in their entirety, without any misstatements or errors.

The auditor will also perform a detailed review of your accounting systems and systems of control.

Depending on the size of your business, the financial audit could take several days.

For some businesses a financial audit is required by law, but even when not mandatory, there are lots of reasons why your business could benefit from an audit;

• A financial audit report provides a professionally documented statement which supports a business’s financial position and could be used as the basis for future finance or mortgage applications.
• A financial audit will provide peace of mind that your accounts are in full compliance with statutory requirements.
• A financial audit requires a detailed understanding of the business and its processes. Such knowledge can present the opportunity to provide proactive business advice on many matters.
• The possibility of fraud can be reduced. An external financial audit can act as a deterrent to any potential fraudster.

To help your financial audit run smoothly and in a timely fashion, it would be helpful if your financial records are readily available. Which is why we have compiled this comprehensive checklist of the items most frequently required by the auditor during the course of an audit.

• General ledger that covers the entire financial year
• Trial balance
• Articles of incorporation
• Accounting policies and procedures manual
• Loan and lease agreements
• Minutes of meetings of the Board of Directors
• All sales and purchase invoices raised and received during the financial year
• Year-end bank reconciliation and bank statements
• Detailed list of all accounts receivable at the end of the financial year
• Detailed list of all accounts payable at the end of the financial year
• Detailed stock take at the end of the financial year
• Fixed asset register

During the audit, the auditor may request other documentation, so it’s advisable for your bookkeeper or clerk to be present to avoid any unnecessary delays.

We hope that you’ve found this checklist useful. For further information about our Financial Audit Services please contact our expert team of accountants.

Here are some other resources that you may find useful;

Accountant or Auditor?

MiFID Audits for FCA regulated businesses

SRA Client Money Audits

Charity Audits