Whether you’ve just stepped into a treasurer role at a local sporting club, started an administrative position at a school, or are responsible for preparing financial information for the first time, it’s natural to have questions about what an audit process involves.
Allen Audit & Advisory Partner Katrina McPhee understands that while audits can seem intimidating, they’re an important part of maintaining strong financial governance.
“Think of it as a health check for your organisation’s finances,” Katrina says.
“We test and verify the numbers, ensuring key transactions, balances, and disclosures are supported by evidence and comply with the relevant accounting standards and regulatory requirements.
“The goal of an audit isn’t to find fault. It’s to provide confidence to boards, members, stakeholders, regulators, and funding bodies that the financial information can be relied on.”
We’ve broken down the audit process step-by-step, so you know what to expect during your next audit.
What to expect during an audit
An audit is an independent review of an organisation’s financial information to provide assurance their financial statements are accurate and fairly presented.
Katrina explains it’s a collaborative process built on communication and planning.
“Our role is to ask questions, review supporting documents, test key transactions, and gain an understanding of the organisation’s operations and controls,” she says.
“We work closely with management to ensure any queries are resolved efficiently, and any identified issues are discussed openly.
“Audits run smoothly when information is prepared in advance, and communication remains constant throughout.”
Documents needed for an audit
While every organisation is different, there are several documents auditors commonly request before fieldwork (the evidence-gathering phase of an audit) begins, including:
- Trial balance and general ledger
- Bank reconciliations and bank statements
- Supporting schedules for major balance sheet accounts
- Debtor and creditor listings
- Fixed asset registers
- Payroll reports and reconciliations
- Board and committee minutes
- Budgets and management reports
- Grant agreements and funding acquittals
- Significant contracts, leases, and loan agreements
“Having this information ready in advance can significantly reduce the time required to complete the audit,” Katrina says.
Before the audit
An audit begins long before auditors arrive on site or commence fieldwork, with extensive planning procedures that help ensure the audit runs smoothly.
“We start by developing our audit plan, which involves learning about the organisation, identifying key risks, and determining the areas that require the greatest focus,” Katrina says.
“Then we review prior year findings, consider changes during the year, and prepare detailed information requests so management knows exactly what will be required.
“This stage allows us to perform the audit efficiently and focus our attention on the areas that matter most.”
Fieldwork and testing
After planning is complete, auditors begin conducting fieldwork and testing, either on site or remotely, depending on the organisation.
“Once fieldwork starts, we work through our audit program by testing transactions, reviewing supporting documentation, and discussing key matters with management,” Katrina says.
“We may select samples of payments, payroll transactions, revenue items, or other transactions to verify they are appropriately recorded and supported.
“We also review significant estimates, assess accounting treatments and evaluate internal controls, where relevant.
“Throughout this process, we maintain regular communication with the client to discuss progress, clarify queries, and address any matters as they arise.”
What happens if an issue is identified?
It’s not uncommon for issues to be identified during an audit. Katrina says the first step is to discuss any issues with management to understand the circumstances and obtain relevant information.
“In many cases, issues can be resolved by providing further supporting evidence or correcting a processing error,” she says.
“However, if the matter remains unresolved, we assess its impact on the financial statements and determine whether it should be reported as an audit finding or reflected in the audit opinion.
“Findings are not necessarily negative. They often provide valuable opportunities to strengthen processes, controls, and financial reporting practices.”
The final audit report
“Once testing is complete, we finalise our review, evaluate all audit evidence, and form our overall conclusion,” Katrina says.
“We then discuss the outcomes with management and those charged with governance, including any recommendations for improvement. Then we issue the final audit report.
“The end result is an independent opinion that provides stakeholders with confidence in the organisation’s financial reporting and governance processes.”
While every audit is unique, the overall process remains much the same. Understanding what’s involved can help remove the uncertainty and allow organisations to approach audits with confidence.
Katrina says the most successful audits are built on preparation, communication and collaboration.
“When clients are organised, and we’re able to work together throughout the process, the audit becomes much more efficient for everyone involved,” she says.
“An audit shouldn’t be something organisations fear. It’s an opportunity to provide assurance, strengthen financial processes and give stakeholders confidence in the organisation.”
If you’re an Australian organisation seeking specialised audit and advisory services, please contact Allen Audit & Advisory on 07 5503 1709 or email info@allenaudit.com.au.
