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Any first-time experience can be scary, so if your business is facing its first audit, whether mandatory or voluntary, it is completely normal to feel a bit overwhelmed. The idea of someone combing through your financials may feel intimidating, but with the right preparation and understanding of the process, your audit can become a valuable opportunity to strengthen your business’s financial health and credibility.
We will help you by breaking down what you can expect from your first audit, step by step, and how to prepare so it runs smoothly.
At its core, an audit is an independent examination of your financial statements. The goal is to express an opinion on whether they present an accurate and fair view of your financial position following applicable accounting standards.
However, an audit is more than just a compliance tool – it can uncover inefficiencies, strengthen internal controls, and reassure stakeholders that your financial statements are reliable.
The auditors will begin by learning about your business, your industry, and any key risks they should be aware of. This helps them tailor the audit to focus on areas of higher risk, such as complex transactions, significant estimates, or internal control weaknesses.
What you need to do:
Next, the auditors will send a prepared-by-client (PBC) list: a detailed list of all documents and records they will need to access.
The documents you need to provide often include:
Pro tip: Prepare early. Delays in document gathering are the most common reason for a slow audit.
This is the “hands-on” part of the audit. Auditors will review your documentation, perform test calculations, and trace transactions through your accounting system to verify accuracy and completeness.
They may also require to:
If your records are digital and well-organised, much of this can be done remotely or with minimal disruption to your operations.
After testing, the auditors may propose adjustments, such as entries that improve the accuracy of your statements. You will have the opportunity to review and discuss these before finalising.
If any control weaknesses or non-compliance issues are identified, these will be highlighted in a separate management report with recommendations for improvement.
The audit concludes with a formal audit opinion. There are several types (e.g., unqualified/clean, qualified, adverse), but the ideal outcome is an unqualified opinion, meaning your financials are fairly stated with no material errors.
You will receive:
Steer clear of rookie mistakes by following these guidelines:
1. Stay organised. Maintain clean and up-to-date financial records throughout the year.
2. Communicate early. Ask questions and clarify expectations with your auditor upfront.
3. Designate a point person. Have someone in your team available to coordinate requests.
4. Be transparent. If there were challenges or changes during the year, let your auditor know upfront.
5. Use it as a learning opportunity. This might sound like something a motivational poster might say, but there is truth in it. Auditors can offer valuable insights into your systems and controls, potentially paving the way for business improvement.
At Huysamen Westraad Inc, we know that your first audit can feel daunting. Our approach is to guide you through the process with transparency, professionalism, and a focus on adding value. It does not have to be scary – we promise.
Whether you are preparing for a statutory or voluntary audit, our professional team will work with you to ensure the process is smooth, efficient, and insightful.
Let's get started - book a consultation with our team today.
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