3 Mistakes to Avoid in Audit Preparation That Will Save You Hundreds of EUR

Audit preparation is not a mere formality. In an era of increasing emphasis on transparency and accountability, a thorough audit is not only a legal obligation but also a signal of trustworthiness to business partners, investors, and banks. Nevertheless, many companies underestimate their preparation, which can lead to unnecessary prolongation of the audit, additional questions, stress, and, ultimately, higher audit costs.

These problems can be relatively easily prevented. In this article, we will examine three common mistakes that auditors frequently encounter during the preparation of documentation. And most importantly – we will advise on how to rectify or eliminate them so that the audit proceeds smoothly, efficiently, and at a reasonable cost.

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1. Unsorted or Incomplete Documents

A common mistake is submitting documents "in bulk" – without order, naming, or context. The auditor wastes time searching, which prolongs the audit.

Practical Advice:

• Name each document uniformly: e.g., "Receivables Ledger 311 – as of 31.12.2024".
• Organize documents into folders by type and area or according to the list of documents received from the auditor, such as Liabilities, Receivables, General Ledger, Payroll Documents, Contracts, and Subsidies.
• Attach a checklist (ideally in Excel) where you mark what has already been submitted and what is still missing. Auditors also greatly appreciate a simple "checklist" of submitted documents.
• Centralize the required documents in one location (e.g., a shared repository, Microsoft Teams, OneDrive, or via email, as agreed).

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2. Weak Communication Between the Company and the Auditor

Even if you have the documentation prepared, questions, requests for additions, or clarifications always arise during the audit. If the responsible person is unavailable, responds with delay, or is unfamiliar with the context, the audit is unnecessarily prolonged. Communication is one of the least expensive ways to streamline the entire process.

A problem often arises when the auditor contacts the wrong people – for example, payroll documents are explained by an accountant who only receives payroll from an external company. Alternatively, an employee may have the information but is not authorized to confirm or make a decision.

Practical Advice:

• Designate one contact person (an audit coordinator) who will be available throughout the audit and can provide information, documents, or quick decisions. They should have a basic overview of all areas and direct access to other colleagues or external accountants.
• Agree in advance with the auditor on the preferred method and frequency of communication. Some prefer email, while others like to address quick questions via Teams or a phone call.
• Keep a record of answered questions and agreed-upon matters – ideally in a shared document or email thread. It will prevent unnecessary repetition and confusing requests.
• If you cooperate with an external accounting firm or payroll agency, ensure they are prepared for questions from the auditor and know whom to contact from your side.

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3. Missing Supporting Documents

An audit is not just about numbers - it is all about evidence. Actual documents, such as contracts, decisions, internal rules, or minutes, must support accounting records. If these are missing, the auditor has no way to verify the authenticity and eligibility of transactions, which can lead to reservations, necessitate corrections to the accounting, or prolong the audit.

Practical Advice:

• Create your checklist of documents that the auditor will need. This may include, for example, contracts, decisions, internal regulations, and inventory records.
• Verify that you have the documents in their current version and a clear and understandable form.
• Do not postpone the collection of documents until "during the audit."
• For documents that are not signed electronically, check the physical signature and date. A contract without a signature or date is not full-fledged evidence for the auditor.

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An audit is not a "necessary evil." If a company prepares for it systematically, it can gain valuable insight into the functioning of internal processes, identify weaknesses, and improve transparency towards partners, investors, or even employees. The better the preparation, the shorter and cheaper the entire audit will be.

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By avoiding the three most common mistakes mentioned, you not only save money but also build trust. And that is hard to quantify in numbers – but it always pays off.