Getting Through the Audit Storm: Five Ways To Prepare for Your Next Audit

3 Min. Read

No one likes surprises. For those who have been through an audit, this sentiment resonates deeply—from auditors to CFOs, whether it’s their first audit or their tenth. Audits demand preparation, focus, and collaboration, and with the right strategies, they can also reveal opportunities to enhance operational strength and efficiency.

Recently, ZRG Interim Solutions hosted a webinar, "Zen and the Art of Audit Readiness," where experts from across the audit landscape—including CFOs, audit committee members, and auditors—shared their insights on navigating audits with confidence. Here are five key takeaways to help prepare for your next audit.

1. Your First Audit Will Be Tough—But It Doesn’t Get Easier for Public Companies, Either

For fast-growing private companies, the first audit is often the hardest. Public companies aren’t immune to challenges either; even with streamlined processes, unexpected complexities can arise. An audit may be necessary due to regulatory requirements or requests from investors, acquirers, or other stakeholders, but the audit experience depends heavily on how prepared the company is to meet the auditor’s demands.

Events like implementing a new accounting system, adopting recent pronouncements, or facing significant staff changes in finance can create gaps in readiness. Even highly efficient public companies may encounter roadblocks with complex accounting issues.

“I’ve seen some pretty messy public companies, and I’ve seen some pretty messy private companies,” remarked Benjamin Shappell, a partner in audit services at RSM US LLP. “On the flip side, I’ve seen very well-managed private companies where the audit is smooth and crisp.”

Preparation is essential—whether you’re a large corporation or a nimble startup—since even minor missteps can complicate the audit process.

2. Strengthening Books and Records Can Add Lasting Value

One benefit of the audit process is the potential for improving recordkeeping and reporting. Audits expose weaknesses that could hinder business insights, particularly if decisions are based on flawed financial information. Addressing these gaps proactively makes financial statements more useful to the management team well before the audit begins.

“You should really address operational issues as soon as possible because your management team will get more use out of the financial statements while you’re in the process of getting ready for your audit,” said Mike Ownby, CFO at Infoworks.io and a former ZRG Interim Solutions professional.

Fixing these issues before the audit allows management to make well-informed decisions with accurate data, maximizing the utility of financial reports.

3. Take Stock of Your Team’s Expertise—And Fill Any Gaps Before the Audit

Audit readiness requires a team with both technical and operational accounting skills. Identifying gaps in expertise and addressing them—whether through training, skill rotation, or third-party support—can significantly ease the audit process. Former CFO Dan Fairfax, now a member of multiple audit committees and corporate boards, emphasized the importance of continuously assessing talent.

With the increasing difficulty of finding talent with deep audit expertise, leveraging external partners to achieve “audit readiness” can save time and costs. “A lease issue or account reconciliation issue can steal time from CFOs, from accounting teams, from sales teams, from development teams,” said Shappell. This level of disruption can be avoided when issues are identified and resolved before the audit.

4. Stable Internal Controls Are Non-Negotiable

Having reliable internal controls is essential for companies of all sizes, particularly those experiencing rapid growth. Clear documentation of key financial processes and ensuring proper segregation of duties are vital. This is especially crucial for public companies, which need to demonstrate adherence to rigorous standards.

Companies in pre-revenue development phases, often with small finance teams, may face challenges balancing workload and controls, but maintaining strong controls remains a priority. Auditors rely on these controls to assess financial integrity, so companies should regularly review and document procedures to confirm proper segregation and accountability.

5. Collaborate with Your Auditors to Minimize Surprises

The sooner you start working with your audit firm, the better. Clear communication with auditors from the beginning helps set expectations and align efforts, reducing last-minute surprises. Through this early collaboration, auditors can also provide valuable perspectives that may broaden your understanding of emerging trends and industry standards.

As Fairfax observed, “I can get blinders on as I’m working on my business. So, I want them to broaden me, to make me aware of new things coming down the road.” Engaging auditors early gives management the benefit of their outside perspective, making the process smoother and less disruptive.

Preparing for an audit requires meticulous planning and a proactive approach. By addressing these five key areas—team readiness, record accuracy, internal controls, external collaboration, and clear communication—companies can transform the audit experience from a dreaded task into a value-adding process.

Ready to Navigate Your Audit with Confidence?

ZRG Interim Solutions has extensive expertise in helping businesses achieve audit readiness through tailored solutions, offering skilled finance professionals, strategic guidance, and support to ensure your team is prepared. Contact us today to learn how we can support your company in navigating the audit process with ease and efficiency.