This guide prepares evidence for the assurance engagement. First use the audit-or-review guide to establish which engagement your company is eligible for. Main guide.
Freeze a controlled starting point
Agree the reporting period, accounting framework and engagement requirements. Export a dated trial balance and general ledger, then maintain a change log for subsequent adjustments. Use a clear file index so a reviewer can find the supporting schedule from a ledger balance.
Do not send several files all called “final accounts.” Identify the approved working version and explain which adjustments have been posted. The auditor should be able to trace a revised balance without comparing unrelated spreadsheets manually.
Prepare the core reconciliations
Include bank reconciliations and statements, receivable and payable listings, inventory records, the fixed-asset register, loan schedules, payroll reconciliations and tax balances as relevant. Match every schedule total to the trial balance and explain differences.
For example, if the receivables listing totals €81,000 but the ledger shows €79,500, resolve or document the €1,500 difference before presenting the listing as reconciled. Include subsequent receipts and credit notes where requested to support the assessment of balances.
Address cut-off, estimates and related parties
Collect invoices and delivery or service evidence around year end to support the period of recognition. Document accruals, prepayments, provisions and material estimates with their assumptions. Keep related-party agreements, balance confirmations and transaction explanations accessible.
Provide corporate minutes, significant contracts, legal correspondence and subsequent-event information relevant to the accounts. Sensitive records should be shared through the agreed secure channel. Obtain approvals for access rather than forwarding unrestricted identity or payroll files widely.
Manage queries without compromising independence
Assign an owner and target date to each outstanding request. Retain explanations and supporting documents together, and post agreed adjustments through the company’s controlled process. The auditor determines the procedures and evidence necessary for the engagement.
Use the bank-reconciliation guide and month-end checklist throughout the year. Preparation is easier when records are maintained continuously rather than reconstructed after the reporting date.