CHECKLIST
Audit Readiness Checklist
About an hour to work through, and worth doing a full year before the first audit, because the fixes are measured in months and the opening balances get audited too. An audit does not test whether the numbers look right. It tests whether they can be evidenced: every balance to something outside the ledger, every judgment to a stated basis, every cut-off to a document with a date on it.
- Five sections, seventeen checks, about an hour
- The raised thresholds that decide whether you need one at all
- The judgment areas a first audit actually argues about
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Who this checklist is for
Companies growing toward the audit thresholds, companies whose investors or lenders require audited accounts regardless of size, and anyone with a first audit already booked who wants it to be boring.
Growth is carrying you toward the thresholds
The test is mechanical: an audit becomes compulsory once you exceed two of three limits, £15 million turnover, £7.5 million balance sheet total, 50 employees, for two consecutive financial years, on the raised thresholds in force from 6 April 2025. The first section has you score your last two year ends, because the answer is often “next year” and next year is soon.
Someone can require one whatever your size
Shareholders holding 10 per cent can demand an audit, some facility agreements and most institutional investors simply insist, and a small company inside a group that is not small can be caught by the group. The checklist walks each route, because the surprise audit is the unready one.
Your first audit is already booked
First audits test the past: opening balances get audited, so the year before the first audit year has to hold up too. The last section is the year-before work: appoint the auditor months out so they can attend the stock count and review systems, agree the judgment treatments before the sign-off meeting, and brief the team, because auditors ask people, not just files.
FACTS
The thresholds, raised from 6 April 2025
Turnover £15 million, balance sheet total £7.5 million, 50 employees: exceed two of the three for two consecutive years and audit is compulsory. The limits rose by roughly half in April 2025, which took thousands of companies back out of audit, and the two-year mechanic means this year’s growth decides the year after next.
2 of 3
Limits exceeded, two years running, and audit is compulsory
10%
The shareholding that can demand an audit at any size
FACTS
Going concern runs from the signature, not the year end
The judgment auditors probe hardest is going concern: at least twelve months of visibility from the date the accounts are signed, which for accounts signed nine months after year end means a forecast reaching almost two years past the period being audited. A rolling forecast with a downside case is the evidence, and the close discipline is what keeps it credible.