The annual statutory audit is one of the most concentrated bursts of financial scrutiny any organisation faces. The audit itself typically runs for two to four weeks; the real work — the preparation that determines whether those weeks go smoothly — should begin six weeks earlier. Companies that start preparation on the day the auditors arrive invariably face delays, qualifications, and the awkward conversations that follow.
Weeks 6–5: close the books correctly
Before your auditors arrive, your accounts must be closed. This sounds obvious, but "closed" in audit terms is more rigorous than "done for management reporting". Every ledger entry needs a supporting document. Bank reconciliations should be complete to the last paisa. Receivables and payables should be reconciled to creditor/debtor confirmations or at least to the relevant contracts and invoices. Inter-company balances must agree across both entities. The most common delay in audits is the discovery that books were "closed" for reporting purposes but not at the transactional level — entries are still being passed in the previous period.
Weeks 4–3: prepare the key schedules
Auditors will request a standard set of schedules at commencement — and the speed at which you produce these sets the tone for the entire engagement. The core documents are: fixed asset register (with depreciation workings), inventory valuation schedule, debtors ageing (broken into 0–30, 31–60, 61–90, and 90+ day buckets), creditors listing with terms and outstanding amounts, loan and borrowing schedule with sanction letters, board resolutions for major transactions, and the tax computation workings. Having these ready in a shared folder on day one buys goodwill and saves time on both sides.
Tip: Ask your auditor in advance for their PBC (Provided By Client) checklist. Most firms send this 4–6 weeks before fieldwork. Treat it as the definitive list; don't improvise your own.
Weeks 2–1: resolve the known issues
Every business has transactions that are "complicated" — a related-party sale at an unusual price, an old unreconciled balance, a provision that was never reversed, a disallowance that the company disagrees with. The week before audit commencement is the time to document your position on each of these clearly and in writing. An undocumented position discovered mid-audit becomes a qualification. The same position, pre-documented with your legal or tax counsel's backing, becomes a disclosure note. The distinction is significant for your audit report.
Working with your auditors
The audit is not adversarial — but it requires your management team's time and focus. Assign a single point of contact (typically the CFO or head of accounts) who can commit to being available for queries throughout fieldwork. Clear, prompt responses to audit queries are the single biggest driver of a smooth, on-time audit. Every query that takes more than 24 hours to answer extends the audit by a day. Build this into your team's calendar before the audit begins.
If your business is approaching the statutory audit threshold (turnover above ₹1 crore for non-digital businesses) or has recently grown past it, our audit team can run a readiness review before your first formal audit — so you know what to expect.
