Auditing is an essential part of any business. Through this process, you can easily bring to light pain points that is hindering your company’s improvement. It is also a way for you to make necessary changes and corrections to processes that may not be working or slowing down your business’ growth and development.
But before any auditing can be done, preparation of necessary documents must be fulfilled first so that the auditors will have a factual basis on their check and balance that they will conduct on a company. Here are the basic documents that you need prepare for the auditor to peruse:
- Articles of Incorporation
One of the documents that auditors require is the articles of incorporation. As part of the audit, they would need to know all the shares a company has, whether it is issued, authorized or outstanding. This would also include basic information of the company that is included in the by-laws.
- General ledgers
Every company has a general ledger being kept and updated by an accountant or a finance team. In the case of auditing, the ledger would indicate the amount that they auditors would have to tally and audit. Companies today are keeping their ledgers digitally or through their accounting system which can be easily downloaded for reference.
- Trial balance
One of the favorite documents that every auditor should have is the trial balance. Trial balance is a document that contains the all the figures of a company’s financial transaction. Auditors can trace any transaction or how the cash flow work through the trial balance sheet provided by the accountant or recorded in the accounting system.
- Copies of loans and outstanding contracts
Some companies usually enter into loan agreements for different reasons (e.g. expansion, lease of assets, improvements, etc.). As part of the auditing process, auditors request for copies of loan agreements with specified amount. Same goes for material contracts that pertain to long-term agreements with trusted contractors and suppliers.
- Minutes of the meeting
It may seem a little intrusive but auditors would also need to see the minutes of the meeting that are related to company’s finances. This is to check whether the points that were discussed in the meeting is implemented on the agreed schedule or if there are changes implemented that were not stated on the minutes of the meeting. All these minutes should be turned over to the auditors before the start of the auditing process.