Common Mistakes Before an External Audit. - FChain

The audit is approaching, but the documents are in chaos? Mistakes made before an external audit are costly. Read about the most common errors entrepreneurs make and how to prepare to pass the inspection without stress and remarks.

Last time, we touched on the topic of the necessity of audit outsourcing (Accounting Outsourcing: Why Do Businesses Choose It?).

And this is especially important because an external audit is always stressful. Even if everything is fine within the company, the entrepreneur still worries: “What if the auditor finds something?”, “What if the accountant missed something?”, “What if we did something wrong?”.
But most of the problems revealed during an audit arise not because the company “works poorly,” but because it was not prepared.

Here are the most common mistakes almost all entrepreneurs make before an external audit — and which are easy to avoid.

1. Lack of order in documentation

90% of audit problems are caused by chaos in documents.
There are no acts, no contracts, no primary documents, no signatures, appendices, agreements, or payment confirmations.

The auditor sees this as a discrepancy, and it leads to:

• additional inspections,
• increased timelines,
• higher risk of remarks,
• possible adjustments.

Order in documentation is half of a successful audit.

2. Unreconciled balances: accounting ≠ reality

A common situation:

• the accounting balance exists,
• but there are no real confirmations of indebtedness.

The auditor necessarily cross-checks:

• bank balances;
• receivables and payables;
• cash;
• inventory;
• fixed assets.

When accounting lives separately from reality, the result is always the same — remarks, corrections, additional requests.

3. Attempting to “quickly fix something” before the audit

This is one of the most dangerous mistakes.
A week before the audit, the accountant hurriedly changes entries, closes periods, adjusts accounts.

Auditors notice such changes instantly — and the inspection becomes stricter.
The best approach: do not change anything before the audit without consulting the auditor or the CFO.

4. Unprepared accounting department

Sometimes the accountant does not understand:

• how to provide documents;
• how to respond to requests;
• what data auditors need;
• which periods are being checked.

The work slows down, the entrepreneur becomes stressed, and the audit drags on.
Good outsourcing companies prepare in advance:

• document lists,
• checklists,
• exchange procedures,
• electronic folders,
• regulations.

This speeds up the audit by 2–3 times.

5. Lack of a preliminary mini-audit

The biggest mistake is going into an audit “blindly.”
When a company does not know what the auditor will find, it takes a risk.

A preliminary check (pre-audit) identifies:

• errors;
• “red flags”;
• tax risks;
• incorrect entries;
• missing documents.

This allows everything to be corrected in advance — and to pass the external audit calmly.

Audit is not a punishment, but a protection tool.
But to make it painless, it is important to eliminate mistakes in advance, prepare documents, and ensure order. Outsourcing companies do this faster and more efficiently — and help businesses go through the audit without stress, remarks, or losses.