Traditionally, audits take a lot of work. From sorting through old files to sifting through past emails, finding all the documents and evidence you need can be a lengthy process.

While it’s always important to keep the relevant business records (in many countries the requirement is up to six years or even more as businesses can be audited by tax bodies like the ATO, IRS, or HMRC), this is even more so for organisations with a regular audit. Not-for-profits, in particular, often have to be audited on a yearly basis, either by an internal, external, or government party.

This makes it all the more important to be audit-ready at all times. But what helps with this? Simplifying audit preparation is all about capturing the right information and making it easy to find – think of simply handing over a login rather than boxes of invoices, bills, and other financial documents.

“We're finding more auditors are working remotely these days –  they're not coming on site to client premises as much and that's typically because they're trying to be more efficient,” says Brendan Lucas, Head of Accounting APAC at ApprovalMax and Founder of Next Dimension Accounting. “Anything you can do to speed up the process and get the auditors the requested information quickly is helpful.”

What makes audit preparation even more critical is timing. Often, audits happen just after year end. This doesn’t leave very much time to get your books in line, making it a stressful race to the finish line after just finishing another one. So, what can make it easier, especially with little time at hand?

Well, just think about the state of your kitchen after cooking a big, elaborate meal. Dishes piled up in the sink, ingredients strewn across counters, and sauce splattered everywhere. We’ve all heard the advice that ‘cleaning as you go’ makes tidying up much easier – and it’s true. Then, all you have to do is stack the dishwasher and press ‘Start’.

It’s the same for audit preparation. Except technology makes it even simpler; it basically stacks the dishwasher for you these days.

First though, what’s the point of an audit?

There are a broad range of types of audits. Some are internal vs external, voluntary vs mandatory, or run by the government vs another third party. This depends on the region you operate in.

Generally, an audit checks whether the information presented in the annual financial statements is accurate and lines up with the evidence available. Depending on the type of audit, this will verify that proper processes and procedures have been followed, and that proper accounting practices have been used based on the industry and region.

An audit doesn’t check each and every figure – it’s based on selective testing. This means it doesn’t look at every transaction in detail. It also doesn’t test the adequacy of an organisation’s financial controls, but only whether those in place have been followed.

Audits help assure stakeholders that your house is in order. While certain industries and business types, like not-for-profits, might have more stringent audit requirements, it’s important for organisations of all types to have their records in order for what the future might hold – like selling your business or getting investment.

Nailing your audit preparation

The easiest way to simplify your audit preparation is by having all the right info organised and easily available. But without the right approach, that can be harder than it sounds.

So how can you not only gather the right information but make it faster and easier to access?

Read our guide to learn how, drawing on insights from ApprovalMax’s expert advisors who have navigated this themselves. In the guide, find out how to:

• ‍Put the right controls in place – and follow them. Consider which controls work best for your business and how technology automates processes to make them easier.‍
• Automate your audit trails and reports. Say goodbye to sifting through piles of receipts for good and learn how to automatically generate audit trails and reports using technology‍
• Keep everything in order, year-round. Since timing is one of the most challenging elements of audit preparation, why not make sure you’re audit-ready all the time.‍
• Give auditors easy access. More and more, auditors are working remotely rather than on site. This means it’s all the more important to give them digital access to the right information.