How to Prepare for an Audit, and Get It Done Faster

Fix those three and everything else is administration.

Six weeks before

Reconcile every bank account to the closing date. Every one, including the dormant account nobody uses and the card account.

Chase the supplier invoices you know are missing. This is the last point at which finding them is realistic.

Confirm your closing inventory count date and who will attend.

Four weeks before

Write down your related party arrangements. What the director's loan account is, on what terms, and whether it is repayable. What you charge the company you also own, and why that amount.

If these exist only as an understanding in your head, the auditor cannot test them and will raise it.

Agree accounting policies for anything new during the year. A new lease, a new revenue stream, a new asset class.

Two weeks before

Prepare the trial balance and check it agrees to your ledgers.

Assemble the standing documents. Trade licence, memorandum, shareholder register, lease agreements, loan agreements, VAT returns for the period.

Prepare your fixed asset register with additions and disposals for the year, and be able to point at the assets.

During

Give one point of contact. Audits slow down when three people answer the same query differently.

Answer queries in batches daily rather than as they arrive. It is faster for both sides.

When you do not know, say so rather than guessing. A wrong answer costs more time than no answer, because it gets tested and then re-asked.

The three that always cause delay

Bank reconciliations left to year end. A year of unreconciled statements takes longer to fix than twelve months of monthly work, and the errors compound.

Related party terms that were never agreed in writing.

Large expenses with no invoice. "It was paid from the bank" is not support for a AED 40,000 cost.

What to do at the end

Read the management letter. It lists the control weaknesses your auditor found, and most owners never open it.

Read the adjusting journals. That list is exactly what your bookkeeping got wrong, compiled by someone independent, at no extra cost.

Then apply both to next year rather than filing them.

The compounding effect

A company that reconciles monthly and documents as it goes gets a cheaper audit every year, because the auditor's risk assessment improves.

A company that leaves everything to year end pays a mess premium annually, and never finds out how much of the fee was avoidable.

Where we fit

Send your trial balance, licence, and whether your banks are reconciled to date.