How to Prepare for Your First Statutory Audit
March 2026
A first statutory audit is rarely difficult; it is often just unfamiliar. Most delays and cost overruns come from missing documentation and unresolved accounting positions — not from complex audit issues. Preparing well makes the whole audit faster, cheaper and less disruptive.
Start with the trial balance and general ledger. Reconcile every control account (bank, receivables, payables, VAT, payroll) to supporting subledgers before the auditor arrives. Unreconciled control accounts are the single biggest cause of audit delays and management letter points.
Prepare a lead schedule for every material balance in the financial statements — an Excel workbook per caption (e.g. Property, Plant & Equipment, Trade Receivables, Inventories) with movements, additions, disposals and supporting calculations. Auditors will ask for these anyway; giving them early saves days.
Gather source documentation: sales and purchase invoices, contracts, lease agreements, loan agreements, board minutes, and legal correspondence. Store them in a shared folder organised by financial statement caption so the auditor can self-serve without repeatedly emailing your team.
Take a position on judgemental areas early: revenue recognition timing, provisions, impairment indicators, going concern, related-party disclosures. Write a short memo per topic setting out management's conclusion and the accounting standard applied. This shifts the audit conversation from investigation to review.
Plan the timeline backwards from the Registrar of Companies filing deadline. Agree the interim and final audit visits with your auditor, book internal review time, and diarise the board meeting to approve the audited financial statements. First audits typically take longer than subsequent years, so give yourself extra buffer.
Finally, treat the audit as a two-way conversation. Ask the auditor what they need, when, and in what format. A well-prepared first statutory audit builds a foundation that makes every future audit shorter and smoother.