The first audit is easier when the company can explain how it started, how it earned or spent money and why each material balance exists. Prepare a coherent file rather than handing over bank statements at the last moment.
Start with company and opening records Provide incorporation documents, ownership and capital information, relevant resolutions and significant contracts. Explain founder funding and any transactions before the main bank account opened.
Reconcile the operating records Prepare sales and expense records, bank and processor reconciliations, unpaid customer and supplier balances and inventory information where relevant. Keep supporting documents connected to entries in the ledger.
Explain unusual items early Flag related party transactions, large refunds, reserve balances, loans, asset purchases and changes in business activity. The auditor may need confirmations or additional evidence, so early identification helps scheduling.
Agree a timetable and responsibility list Ask for the auditor's request list and identify who will supply each item. Record questions and responses centrally. Avoid sending changing versions of the same spreadsheet without explaining the revisions.
For an ecommerce company, the payment dashboard may show a reserve that is absent from the bank statement. Include the provider report so the balance can be understood. For a consultancy, focus on contract milestones and unpaid fees instead.
Good preparation does not mean choosing the audit conclusion. It means supplying accurate, complete information so the auditor can perform the required work and the directors can understand the resulting financial statements.
Sources and scope
General information, not advice for your individual legal or tax position. Confirm current requirements with the relevant authority or provider.