Preparing for an audit
Audits require organized records and transparent processes. Start preparatory work early to reduce stress and fees.
Preparation checklist:
- Reconcile bank statements and credit cards monthly
- Maintain clear documentation for revenue, expenses, and contracts
- Ensure payroll records are complete and compliant
- Keep fixed asset lists and depreciation schedules
- Prepare a schedule of receivables and payables
Practical tips
- Use accounting software and create an audit folder with supporting documents.
- Address prior-year issues or inconsistencies before auditors arrive.
- Assign a point person to coordinate requests and responses.
Use professionals
For first-time audits, engage a CPA to advise on records, control gaps, and how to present information. Good preparation shortens the audit and reduces surprise adjustments.