No business owner looks forward to an audit. However, audits are a necessary part of doing business – they provide an independent review of your company’s financial statements and operations.
In order to make the process as smooth as possible, it is important to prepare for an audit in advance.
In this blog post, we will outline the three simple steps that you need to take in order to get ready for an audit!
1. Request an Audit Request List in Advance
An Audit Request List or a Provided by Client (PBC) request list is a list of items that the auditor will request during an audit.
Before the audit, you will receive the PBC list from the auditor that outlines all of what is needed for the auditing procedure. This list should be compiled and ready before the audit begins.
By having this list prepared, you will be able to provide the auditor with the information they need in a timely manner.
You can actually request a PBC in advance. A PBC is extensive and usually covers items such as bank statements and inventory records.
By requesting a PBC early, you’ll have more time to prepare for the audit instead of scrambling at the last minute.
2. Organise Your Financial Statements
Your financial statements are one of the most important pieces of information that the auditor will review. These statements give the auditor a snapshot of your company’s financial health.
In order to make the audit process go smoothly, it is important to have your financial statements organised and up-to-date.
If you use accounting software, this task will be much easier. However, if you do not use accounting software, you will need to make sure that your financial statements are well-organised. This means that all expenses and income should be categorised properly.
Additionally, all supporting documentation should be easily accessible. This documentation includes receipts, invoices, and bank statements.
By having everything in one place, the auditor will be able to review your financial statements quickly and efficiently.
3. Ask Questions
If you have any questions about the audit process, it is important to ask them in advance. By asking questions, you will be able to clarify any uncertainties and be better prepared for the audit.
Asking questions will also show the auditor that you are committed to the process and are taking it seriously. This commitment will reflect positively on your company.
If you have any doubts regarding the Audit request list or the organisation of your financial statements, don’t hesitate to reach out to your auditor. They will be more than happy to help you and answer any questions that you may have.
Conclusion
Preparing for an audit does not have to be a daunting task.
By following these three simple steps, you can prepare for an audit with ease. Requesting a PBC list in advance, organising your financial statements, and asking questions are all key components of the audit preparation process.
By taking the time to prepare for an audit, you can make the entire process much smoother – for both you and the auditor.
To know more, get in touch with us today.
