What documents should a business prepare before an external audit?
General information as of 26 October 2026
Good audit preparation starts with records that agree with one another. A trial balance that cannot be reconciled to its supporting schedules will usually require further explanation and investigation.
The list below is a practical starting point, not a statutory checklist for every business. Under PSA 500, the auditor evaluates the quantity and quality of evidence, including its relevance and reliability. Completing a document list does not establish that sufficient appropriate audit evidence has been obtained. [1]
Build a reconciled audit file
| Area | Useful records to prepare, where relevant |
|---|---|
| Core accounting | Draft financial statements and notes, final trial balance, general ledger, prior-year financial statements, opening-balance support and proposed adjustments |
| Cash and working capital | Bank statements and reconciliations; receivable/payable aging; subsequent collections and payments; inventory listings, count instructions and valuation schedules |
| Long-term balances | Fixed-asset register and depreciation; purchase/disposal support; loan agreements; repayment schedules; lease contracts and calculations |
| Tax, payroll and corporate records | Applicable returns, filing acknowledgments, payment evidence, withholding certificates, payroll reconciliations, registration documents, significant contracts and board minutes |
| Judgments and changes | Related-party details; significant estimates; litigation and claims; forecasts where relevant; system or accounting-policy changes; significant events after year-end |
Schedules should agree to the ledger and trial balance. Explain outstanding differences and retain the supporting documents. For exported reports, retain the period, filters and source-system details so that completeness can be checked. These are preparation recommendations, rather than a claim that every listed document is legally mandatory. [1]
Arrange procedures that need advance coordination
Inventory counts. Where inventory is material, PSA 501 generally requires auditor attendance at physical counting unless impracticable. Discuss count dates, locations, movement controls and third-party inventory before the count takes place. Alternative procedures depend on the circumstances; a management count sheet alone does not automatically resolve the auditor's evidence requirements. [2]
External confirmations. When confirmations are used, PSA 505 requires the auditor to control the requests, including selection, design, dispatch and direct responses. Management can provide information and authorize requests, but a confirmation obtained and forwarded by the client is not automatically equivalent to an auditor-controlled confirmation. [3]
Management representations. Written representations form part of the audit process, but do not provide sufficient appropriate evidence on their own. They cannot replace other necessary audit work. [4]
Agree responsibilities and a realistic timetable
PSA 210 requires agreement on the engagement terms and management's acknowledgment of its responsibilities for financial statements, necessary internal control, and access to relevant information and personnel. Identify a responsible contact for each area and discuss deadlines before key staff absences or year-end procedures. [5]
A practical next step: Request a tailored document list and planning discussion early. Use an agreed secure transfer channel, role-based access where available, and appropriate authorization for confidential material. Do not send passwords through an initial consultation form.
Disclaimer: This is a general preparation guide. The auditor determines the necessary procedures and evidence for the engagement. Providing the listed records does not guarantee completion by a particular date, an unmodified audit opinion, or acceptance by a regulator. Legal retention and submission duties must be assessed separately.
Sources and technical references
- PSA 500, paragraphs 5–9: accounting records, sufficiency, appropriateness and entity-produced information.
- PSA 501, paragraphs 4–8: material inventory, attendance and alternative procedures.
- PSA 505, paragraphs 6(a) and 7: external confirmations and auditor control.
- PSA 580, paragraphs 4 and 10–11: written representations and their limitations.
- PSA 210, paragraphs 6(b) and 9–10: preconditions, responsibilities and agreed terms.