Rishen Narsing, CA(SA)
An audit is a fixed amount of evidence gathering. The only variable is who does the preparatory work: you, at your own cost and pace, or the audit team, at their hourly rate under deadline. That is the entire economics of audit readiness, and it is why the same company can pay materially different fees in consecutive years for the same scope.
This checklist covers what to establish before you start, the schedules to prepare, the reconciliations that must balance, and the conversations worth having with your auditor early.
First, confirm what you actually need
Not every South African company is audited. The requirement is driven by the Companies Act and the Regulations, principally through the public interest score, calculated from average employees, third party liabilities, turnover and the number of holders of beneficial interest.
| Broad position | Typical requirement | Also check |
|---|---|---|
| Higher public interest score | Statutory audit | Whether the MOI imposes anything further |
| Middle band, independently compiled statements | Independent review | Who compiled the statements, and their independence |
| Middle band, internally compiled statements | Audit may be triggered | The compilation question is decisive here |
| Owner-managed, all shareholders are directors | Often neither audit nor review | The exemption has conditions, confirm them |
Eight weeks before year-end: the physical work
Some evidence cannot be recreated after the fact. If you miss these, the auditor either qualifies the area or does expensive alternative procedures.
- 1Plan the stock count. Date, teams, count sheets, cut-off procedures for goods in transit, and an invitation to the auditor to attend.
- 2Run a [fixed asset verification](/blog/fixed-asset-verification-south-africa/). Physically confirm assets exist, are in use, and match the register.
- 3Request third party confirmations where relevant: banks, attorneys, major customers and suppliers, and loan counterparties.
- 4Review debtors for recoverability and document the basis of any expected credit loss provision.
- 5Identify unusual transactions in the year and prepare the reasoning now, while people still remember: disposals, new finance leases, related party loans, restructures.
The audit file: one schedule per material balance
The deliverable is not a shoebox of documents. It is a structured file where every material line of the trial balance has a schedule that agrees to the ledger and is supported by evidence.
| Area | Schedule to prepare | Supporting evidence |
|---|---|---|
| Bank | Reconciliation per account at year-end | Bank statements and bank confirmation |
| Debtors | Age analysis agreeing to control account, plus provision workings | Post year-end receipts, credit notes |
| Stock | Valuation by line, agreeing to the count | Count sheets, costing basis, obsolescence review |
| Fixed assets | Register with additions, disposals and depreciation | Invoices for additions, verification results |
| Creditors | Age analysis, plus a search for unrecorded liabilities | Supplier statements, post year-end payments |
| VAT and PAYE | Control account reconciliations | VAT201s, EMP501 reconciliation, SARS statement of account |
| Revenue | Monthly analysis with cut-off testing at year-end | Contracts, delivery evidence, credit notes after year-end |
| Loans and leases | Amortisation schedule and covenant position | Agreements, statements |
| Tax | Computation reconciling to the ITR14 | Provisional tax payments, prior assessments |
8 wks
Lead time before year-end to start
1
Schedule per material balance
0
Target unexplained reconciling items
Prior yr
Best predictor of this year's findings
Read last year's audit before this year's starts
The management letter and the list of adjusting journals from the previous audit are the cheapest audit preparation available. If the auditor raised the same control weakness two years running, expect them to test it harder in the third. Work through last year's points, fix what is fixable, and document what was decided for anything you chose not to change.
Auditors are not looking for perfection. They are looking for evidence that someone competent has already reviewed the numbers. Give them that and the whole engagement gets shorter.
Rishen Narsing, CA(SA)
During fieldwork: how to keep it short
- Nominate one contact person who owns the query list. Auditors chasing four people in parallel is how a two-week audit becomes six.
- Track queries in a single shared list with dates and owners, and clear them daily.
- Do not renegotiate the numbers mid-audit. Post-fieldwork changes to the trial balance re-open completed work.
- Ask for adjustments as they arise, so you can assess them rather than seeing a list at the end.
- Book the sign-off meeting up front, with the CIPC filing deadline in mind.
After the audit: bank the improvement
The end of an audit is the best moment to improve the process, because the pain is fresh and the findings are specific. Turn every adjusting journal into a change in the month end close, and every control finding into a documented procedure.
Related reading: confirm first whether you need an audit at all in independent review vs audit, and expect the auditor to test the financial controls that stop fraud in a small business.
How Synergy helps
Our close, consolidate and report service includes audit readiness: building the file, preparing the schedules, and acting as the single point of contact for auditor queries. We prepare, your auditor audits, and the independence line stays clear. Where the statements themselves are needed, our AFS preparation service produces them in Caseware, and technical positions are supported by our technical accounting service.
Year-end coming up?
Book a free consultation and we will review your readiness against this checklist and tell you what is missing.
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