Saudi Arabia
United Arab Emirates
Qatar
United Kingdom
Ireland
A statutory audit is the independent examination of a company's annual financial statements by a registered chartered accountant, required by the Companies Act 2017 and performed under International Standards on Auditing (ISA). Companies that prepare well complete the audit faster, receive fewer adjustments and pay less in time charges. Preparation comes down to closing the books properly, reconciling every material balance and having documents ready before fieldwork starts.
Key takeaways
- Agree the audit timetable and the list of required schedules at least a month before year end.
- Reconcile bank, receivables, payables, tax and intercompany balances before fieldwork.
- Attend to inventory counts and fixed asset verification at or near year end.
- Draft financial statements and notes save more time than any other preparation step.
What should be done before the year end?
Agree the audit timetable, the date of the stock count and the format of schedules with your auditor. Review accounting policies for new transactions such as leases, new revenue streams or financing, and resolve open questions before the books close.
Which reconciliations do auditors expect?
Every material balance should be supported by a reconciliation to an external or independent source. Unreconciled differences carried forward are the most common cause of audit delays.
- Bank reconciliations for every account, with bank statements
- Receivable and payable ledgers agreed to the trial balance
- Intercompany balances agreed with each related party
- Tax balances agreed to returns, challans and withholding statements
- Payroll agreed to payroll records and EOBI and social security filings
How should inventory and fixed assets be prepared?
Inventory should be counted at year end with clear count instructions, cut off procedures and auditor attendance. Valuation should be supported by costing records and net realisable value reviews for slow moving items.
Fixed assets need an updated register reconciled to the ledger, evidence for additions and disposals, and a depreciation calculation that matches the policy.
What documents does the auditor request during fieldwork?
Expect requests for board and shareholder minutes, significant contracts, loan agreements, lease agreements, legal correspondence and management's assessment of going concern. External confirmations for banks, customers, suppliers and lawyers are sent by the auditor directly.
How does a well prepared audit benefit the company?
A clean, on time audit supports the AGM and SECP filings, bank renewals and tax returns, and gives the board a reliable view of performance. It also lets the audit team spend time on genuine risks rather than chasing documents.
Our audit and assurance team shares a tailored preparation list with every client at the planning stage. Companies that need help getting audit ready can use our outsourced CFO service.
Written by
Waqas Aslam, ACA
Founding Partner, Audit and Assurance. Over 10 years in audit and assurance, including 4.5 years at Deloitte in Lahore and Saudi Arabia, nearly 2 years in ICAP's Audit Quality Review function, and 1 year at EY.
Meet our partnersThis guide is general information, not advice for your specific circumstances. Laws, rates and deadlines change, so contact us before acting on it.