A first audit requires evidence about the business and its opening position as well as the current year. Contact the auditor before the year end where possible, particularly if material inventory or significant estimates are involved.
Who is responsible for what?
Directors remain responsible for the accounting records, financial statements and management judgements. The internal finance team may coordinate evidence while an external accountant prepares the accounts. The auditor independently assesses the financial statements and obtains the evidence needed for its opinion. Confirm these roles at the outset.
Why do opening balances matter?
The new auditor needs sufficient appropriate evidence that opening balances do not contain misstatements materially affecting the current period. Prior accounts and records are useful, but an earlier accountant’s preparation work does not replace audit evidence. Discuss missing records and previous audit arrangements before agreeing the timetable.
What should we prepare?
- Prior accounts, the ownership chart and an explanation of how the business operates.
- A reconciled trial balance, ledger and supporting schedules for material balances.
- Bank, borrowing, lease and significant customer or supplier agreements.
- Evidence for inventory, work in progress and significant estimates.
- Management’s going concern assessment, supported by forecasts and assumptions where relevant.
- Board minutes, related-party information and significant events after the year end.
Do we need to prepare every schedule ourselves?
No. Agree a tailored information list and identify the source of each item. An external accountant or specialist may prepare some schedules. Your team should know who checks them, whether they reconcile and when they will be available. Directors remain responsible for the resulting accounts and judgements.
What should we discuss before the year end?
Tell the auditor about material inventory and planned counts early. Attendance and opening inventory evidence can be difficult to address retrospectively. Also identify new systems, acquisitions, unusual revenue arrangements and financing changes that may affect the evidence required.
How much time and cost should we allow?
There is no reliable universal duration for a first audit. Ask for a timetable that includes acceptance, planning, information preparation, fieldwork, queries, review and approval. Ask whether first-year familiarisation and opening-balance work are included in the fee. A late start or evidence gap may affect both the timetable and the opinion.
For fee comparisons, read what affects an audit fee. For eligibility, read our audit exemption and readiness guide.
Sources and further guidance
Discuss your next step
Tell us your year end, reporting deadline, group structure and the issue you want to resolve. We will assess the scope, capacity and independence requirements before accepting an engagement. Discuss your audit requirements
Reviewed 26 September 2026. General guidance; the appropriate approach depends on your organisation and circumstances.