Here are 6 ways to prepare for a successful charity audit

A charity audit can be a real source of stress and anxiety for your organisation – the intense financial scrutiny, endless questions, and ensuring compliance with the Charities SORP make the day-to-day feel almost impossible. 

But these pressures don’t have to bring everything to a standstill – the key is preparation.  

To help make an audit of your charity less overwhelming, we have compiled 6 ways you can prepare – and maybe even impress your auditor. 

Take the stress out of your charity audit – here are 6 ways to prepare 

1. Encourage everyone to get involved  

When it’s time for a charity audit, it is usually the finance team bearing the brunt. But your organisation may be able to provide further insights by getting everyone involved. 

HR staff, support workers, and fundraisers could all help by answering auditor questions. They could take some of the pressure off the finance team and offer a more effective response to certain queries. 

Before an audit starts, it might be worth having a meeting to work out availability, allowing you to arrange allocated days for people to talk with auditors. 

2. Up-to-date bank reconciliations

The importance of an up-to-date ‘bank reconciliation’ with an analysis of all in-transit transactions cannot be understated.  

This is an indicator of ‘good’ cash flow and shows that your charity is taking steps to ensure money is spent appropriately. 

 3. Grant letters

A clear, central record of all grant communications – organised by period – is a dream come true for auditors. 

Keeping everything in one place supports accurate income testing – giving auditors a complete view and making it easier for them to assess deferred and accrued income. 

4. Multi-year funding

Multi-year funding can be a real hurdle during a charity audit. That familiar question – ‘do I need to recognise this?’ – can create worry and confusion. 

Having clear, up-to-date information ready for your auditor makes all the difference. It allows for open, informed conversations around treatment – including changes to terms and conditions.  

This fosters a more collaborative relationship between you and your auditor. 

 5. An up-to-date fixed asset register 

Forgetting to add your capitalised assets to your register of fixed assets – or forgetting to remove disposals – is a significant compliance issue. 

An easy way to minimise risk is to routinely check your register to ensure it is up to date. 

If you decide to add anything, it is worth keeping in mind that your auditor will likely wish to see all relevant invoices. If you are disposing of any assets, they will want to see your receipts. 

 6. Legal documents

Keeping all important documentation – including articles of association – up to date is good practice. It helps keep auditors informed of any changes, ensuring a smooth and efficient examination. 

This list highlights just some of the practical ways you can prepare for a charity audit. Many of these are simple habits your finance team can easily build into their day-to-day routines. 

By following our six-point plan, you’ll stay in control and keep your audit fees firmly in check. 

How AAB can help 

If you have any questions about anything we’ve covered or want to put this advice into practice, don’t hesitate to get in touch.  

Please contact Emily Jackson from our Charity Audit Services or reach out to your usual AAB contact. We’re always here to help.