The Ultimate Statutory Audit Checklist (2026 version)

For many Finance Directors and controllers, ‘audit season’ ushers in a familiar feeling of anxiety. For many people in the business, it’s the most stressful time of the year – and with good reason. If records are disorganised or incomplete, what should be a smooth process turns into audit overrun. This means auditors stay longer, asking many more questions, and their fees spiral upward.

Fortunately, when it comes to your statutory audit, preparation is 80% of the battle. A well-prepared audit not only runs faster and more smoothly, but it also helps ensure that it is a collaborative process that adds value, rather than a forensic test to be endured.

Since April 2025, the UK’s audit exemption thresholds have increased (for accounting periods beginning on or after 6 April 2025). Turnover is one part of the picture, but most companies need to consider the ‘two out of three’ tests (turnover, balance sheet total and average employee numbers) – and the rules can work over more than one year.

So, if you’re growing quickly, it’s worth checking where you sit and planning early. If you’re reading this, you’re likely to be running a growing, successful mid-sized business. This statutory audit checklist will help you take back control of the process – and hopefully your sanity!

Phase 1: Pre-audit planning

Getting your house in order before the audit begins is critical. These are the things you need to address on your statutory audit checklist before the auditors get to work on your accounts.

• The ‘PBC’ List. Your auditor should provide a ‘Prepared by Client’ (PBC) list early in the process. This is the master document listing everything they’ll need from you. It includes trial balances, bank statements, board minutes, contracts and more. If you don’t receive one, be sure to ask for it. Waiting until fieldwork starts is a recipe for chaos and unnecessary expense.
• Review points from the prior year’s audit (if relevant). Did your auditor raise ‘management letter points’ or recommendations last year? If so, make sure they’ve been addressed before the new audit. Any issues that remain unresolved from last year are bound to resurface – and they won’t reflect well on your finance function.
• System review.  Ensure your cloud accounting software (Xero, Sage Intacct or similar) is fully reconciled. If you rely on a bespoke or legacy system, verify that your data exports match your Trial Balance perfectly. Every bank account, credit card and loan should tie back to your general ledger. Discrepancies discovered during the audit are embarrassing and can be time-consuming to fix on the spot.
• The audit timetable. Agree on dates for ‘fieldwork’ (when the auditors arrive on-site or begin remote work) and, if applicable, the stocktake. Coordinate these well in advance to avoid scheduling conflicts.

Phase 2: The ‘hard close’ (at year-end)

Certain events must occur on or before your financial year-end date. Missing these can jeopardise the entire audit.

• The stocktake. If your company holds material inventory, the auditor must be invited to observe the count (per ISA (UK) 501). This isn’t optional. If they can’t attend (or the count isn’t properly evidenced), it can trigger significant extra work and, in some cases, a modified (qualified) audit opinion because they may not be able to obtain sufficient appropriate evidence over inventory.
• Cut-off testing. You need to capture the last shipping and receiving document numbers before midnight on the year-end date. This shows which sales, purchases, and stock movements belong to the current year versus the next. It’s a small administrative step with big consequences if missed.
• Bank confirmations. Authorise your bank to release balance information to your auditors early. Waiting until the last minute often leads to delays, as banks can take weeks to respond.

Phase 3: Your audit deliverables list

Here’s what your auditor will expect from you during fieldwork. Having these ready in advance will dramatically speed up the process:

• Fixed assets. Provide the auditor with your asset register and ensure it matches physical reality. Include purchase invoices for all additions over £1,000 (or whatever your company’s specific capitalisation threshold is).
• Debtors / Receivables. Supply an aged debtor report, plus your calculations for any bad debt provisions. If a customer hasn’t paid in 12 months, explain why you still think the debt is recoverable.
• Creditors / Payables. Provide supplier statements (reconciled), not just the ledger balance. Discrepancies between your ledger and a supplier’s statement must be reconciled before your auditors arrive.
• Payroll. Reconcile your payroll summaries (P32s and RTI submissions) to the general ledger. Differences often arise from timing issues or manual adjustments, so be sure to document them.
• Legal documents. Make sure you provide all the requested legal documents. These will include board minutes from the year, new lease agreements, bank loan agreements and any material contracts that have been signed. Your auditor needs to understand commitments that might affect your financial position.

Phase 4: Completion & disclosure

As the audit wraps up, your auditor will focus on two critical areas:

• Post-balance sheet events. What happened after year-end? Did a major customer go into administration? Was there a fire? Have any legal proceedings begun or have any significant contracts been signed? Events like these  may need to be disclosed in your  financial statements or, in extreme cases, may require the accounts to be adjusted.
• Going concern. This is a hot topic for auditors. Your board needs to prepare a paper demonstrating that the company can survive for at least 12 months from the date the accounts are signed. Include cash flow forecasts, available credit facilities and contingency plans. If there’s any doubt, flag it early – surprises at this stage can derail the entire audit.

Why choose THP for your audit?

At THP Chartered Accountants, we know that audits don’t have to be painful. These are some of the ways in which we stand out:

1. We offer you a director-led service. Unlike some firms where you might never see a partner, at THP, Directors like me (Andy Green) are actively involved throughout your audit. You’ll deal with senior people who understand your business and have access to them throughout your audit.
2. We can conduct much of the work off-site. THP auditors use secure cloud portals to transfer files and we can therefore conduct much of our work remotely. This means we don’t need to camp in your conference room for weeks, disrupting your office space and operations.
3. We add value. We don’t just tick boxes during your statutory audit. We look for opportunities to improve your systems, streamline your processes and help you grow. Whether you’re planning for expansion or considering selling your business, THP’s audits can demonstrate that you have a credible financial foundation.

Done your statutory audit checklist? Talk to us

A smooth audit isn’t just about compliance – it’s a sign of healthy, well-managed business finances.

By following a comprehensive statutory audit checklist, proper preparation becomes second nature. This turns the audit into a valuable process that gives you confidence in your numbers – not to mention peace of mind.

Dreading your upcoming audit? It might be time to switch to a firm that plans with you, not just checks on you. Contact THP’s Audit Team today to schedule a pre-audit health check or request a quote.