How to prepare your business for an audit

Getting ready for an audit is unlikely to be one of your favourite jobs as a business owner. But being prepared, organised and ready can take some of the pain out of it.

Planning ahead helps your auditor get the job done more quickly, and means less disruption to your staff and your business during the process.

Does your company need an audit?

This article is about a statutory audit of your company’s annual accounts by an independent auditor. That’s different from an HMRC compliance check into your tax affairs, which people sometimes call a tax audit or tax investigation.

In the UK, many small private limited companies don’t need an audit of their annual accounts, as long as they meet the conditions for audit exemption. Once a company grows beyond certain limits for turnover, assets or employee numbers, an audit is likely to become a legal requirement.

Some companies need an audit whatever their size, for example public companies (unless dormant), banks and insurance companies, and subsidiaries that don’t qualify for an exemption. You’ll also need one if your company’s articles of association say so. And even if your company is usually exempt, shareholders who own at least 10% of the shares can ask for an audit in writing.

The size limits are set in company law and were raised for financial years beginning on or after 6 April 2025, so it’s worth checking where your company stands. GOV.UK explains the conditions on its audit exemption page.

Five ways to be ready for an audit

Start by agreeing a timetable with your auditor and deciding who in your team will be the main contact. Then, in advance of the audit date, be sure to:

1. Gather all the relevant documents. This includes your financial statements, bank statements, records of expenses, management information and anything else your auditor is likely to ask for. Having your year-end reconciliations done, such as bank, debtors and creditors, makes a big difference.
2. Organise your documents logically. The whole audit is far easier if your financial records are well organised. Make it simple for the auditors to find what they need, and make sure they can get to all the information easily.
3. Look for potential issues early. The last thing you want is a big problem coming up in the middle of your audit. Check for any financial issues or irregularities the auditor may raise, and do it well in advance, so you have time to deal with them before the audit begins.
4. Be prepared to answer questions. Your auditor is likely to ask some probing questions about your business and your financial records. Make sure you’re up to speed with your accounts, and answer questions honestly.
5. Cooperate with your auditor. The auditor’s job is to give an independent opinion on whether your financial statements give a true and fair view and have been properly prepared. That’s much easier if you answer their questions with good grace and provide the information they need quickly.

Sources

Our main sources are GOV.UK and legislation.gov.uk:

• Audit exemption for private limited companies
• The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303)

Talk to us about getting audit-ready

If you think your company’s finances might not be quite ‘audit-ready’, you’re definitely not alone. Many businesses aren’t as organised with their financial records as they’d like to be. Don’t worry, help is at hand.

Whether or not your company needs an audit, we can help you review the health and organisation of your financial processes and get your records in order. Call us on 020 7164 0225, send us a WhatsApp message or email us at info@ibandco.co.uk.

You can also read about our end of year accounts and bookkeeping services.

First published 9 September 2025. Tax content checked on 9 October 2026. This article reflects the rules at the date it was first published. Where something has changed since, we’ve added an update note. Rules and rates change, so please check with us before acting.