A statutory audit runs much more smoothly when the company arrives prepared. It is not about doing extra work, but about organising in advance what will have to be provided to the auditor anyway. These are the six keys that help the most, based on our experience with companies of different sizes and sectors.
1. Plan the timetable ahead
Under Spanish company law, annual accounts must be drawn up within three months of the year end and submitted for approval by the general meeting within the following six months. Where an audit is mandatory, the auditor must also be appointed by the general meeting before the end of the financial year to be audited, for an initial period of no less than three and no more than nine years.
In practice: agree a timetable with your auditor months in advance, with dates for planning, interim work, final work and delivery of the report. The earlier these are set, the less pressure there is at the end.
2. Close the books before the team arrives
A clean accounting close is what shortens fieldwork the most. Before the visit, you should have completed at least the bank reconciliations, the reconciliation of balances with customers and suppliers, depreciation, accruals and the year's provisions. Differences that surface at this stage are far cheaper to resolve than those found once the auditor is already on site.
3. Have the key documentation to hand
Every audit has its own particularities, but almost always the same documents are needed. If they are organised and accessible from day one, weeks of back-and-forth are avoided:
- Trial balance, general ledger and journal for the year.
- Year-end bank statements and a list of current accounts, loans, guarantees and credit facilities.
- Significant contracts with customers, suppliers, landlords and lenders.
- Minutes of the general meeting and of the governing body.
- Details of inventory and fixed assets, including additions and disposals during the year.
- Payroll, social security and withholdings, together with the tax returns filed.
- Details of related-party transactions.
4. Prepare your judgements and estimates
Items that involve management judgement receive the most attention: asset impairments, provisions and contingencies, recoverability of tax credits, asset valuations or the going-concern assumption. Documenting the assumptions used, and their support, in advance avoids last-minute discussions and helps the auditor reach conclusions on them with sufficient evidence.
5. Appoint a single point of contact
A simple but very effective measure: one person at the company who coordinates the auditor's requests, knows where each document is and can quickly resolve or escalate questions. It avoids duplication, contradictory answers and requests that go unattended.
6. Tell us what has changed
Let the auditor know from the start what has been different this year: unusual transactions or those outside the normal course of business, changes in accounting policies, new financing or breaches of covenants agreed with banks, litigation, restructurings, changes in management or information systems, and significant events after the year end. Sharing context early allows the work to focus on what really matters and avoids surprises at the end.
What to expect from the process
An audit usually unfolds in four phases: planning and understanding the business, interim work before the year end, final work after the year end, and issuing the report. Throughout, it is normal for the auditor to share the issues identified along the way, so that management has time to assess them and, where appropriate, correct them before the accounts are drawn up.
How we can help at Audalia
We support our clients through every phase, from initial planning to delivery of the report, with a stable team and a clear point of contact. If you would like us to review together what you need to have ready in your case, tell us about your situation and an expert from our financial audit team will get in touch.
