What should businesses prepare for year-end audits?

The year-end audit is not only an opportunity for businesses to reassess their overall financial situation internally but also a chance to review and ensure compliance with accounting standards, tax regulations, and legal requirements. To ensure that financial statements accurately reflect the company's financial standing, businesses must thoroughly review their accounting records, documents, and relevant contracts, ensuring they are organized and complete.

Proper preparation not only saves time during the audit process but also enhances transparency, builds credibility, and attracts the trust of investors. So, what exactly should businesses prepare for this crucial period?

Organize Accounting Records and Documents Before the Year-End Audit

The first step businesses should take when preparing for a year-end audit is to reorganize their accounting records and documents. Reviewing and arranging materials such as ledgers, invoices, and transaction records ensures the accuracy and transparency of financial statements.

Additionally, this practice helps auditors efficiently collect and verify necessary data, increasing the reliability of the company during the audit process. Proper organization of accounting records is essential to avoid unnecessary errors or complications, ensuring the level of transparency required by partners and tax authorities.

Prepare Financial Statements

Preparing complete and accurate financial statements is a key factor in ensuring a smooth year-end audit. Businesses must ensure that reports such as the income statement, cash flow statement, and statement of changes in equity are accurate and transparent.

By doing so, companies not only comply with tax and accounting regulations, reducing the risk of violations, but also strengthen trust among partners and investors, paving the way for sustainable growth in the future.

Review Contracts and Financial Commitments

Reviewing contracts and financial commitments is an essential part of preparing for a year-end audit. Businesses need to verify financial contracts, including loan agreements, guarantees, and other financial commitments, to ensure accuracy in their financial statements. Examining loan contracts, asset lease agreements, long-term financial obligations, and guarantees allows businesses to confirm that all debts and financial responsibilities are accurately recorded in their financial reports. This process ensures compliance with accounting and tax regulations while providing auditors with a comprehensive and precise view of the company’s financial position, thereby minimizing risks during the year-end audit.

Address Tax Issues

As the year-end audit approaches, businesses should pay special attention to tax-related matters. Auditors will review financial statements, tax declarations, and tax payments to determine whether the company has complied with tax regulations.

To ensure thorough preparation, businesses should take note of the following:

Comply with New Tax Regulations

Businesses should note that tax regulations may change annually. Staying updated on the latest policies is crucial to ensure compliance with legal requirements. Failing to keep up with or adhere to new tax regulations can result in auditors identifying significant errors, which could negatively impact the audit results and harm the company's reputation.

Provide Proof of Accurate Tax Declarations

Businesses must prepare comprehensive documentation to demonstrate that their tax declarations comply with legal regulations. Auditors will request to review these documents to verify adherence to tax obligations and policies.

Plan the Year-End Audit

Creating a detailed plan for the year-end audit is a critical step to help businesses remain proactive during the audit process. A well-structured plan not only saves time but also minimizes potential risks that could arise. Here are some key steps to effectively plan for the year-end audit:

• Set a Timeline for the Audit: Determine the start and end dates of the audit process, as well as other key milestones, to ensure the audit stays on track.
• Prepare Financial Data: As mentioned earlier, organizing and ensuring the accuracy of financial documents is vital. This step streamlines the audit process and helps businesses stay in control throughout.
• Review Processes and Policies: Ensure that your company operates in compliance with legal regulations. Doing so can enhance your reputation with investors, paving the way for opportunities to expand your business.

Financial Statement Audit Services of RSM Vietnam

Financial statement audit services are one of the core offerings of RSM Vietnam. With a team of independent and highly skilled auditors, RSM Vietnam confidently assists businesses in collecting and evaluating evidence to verify the truthfulness, accuracy, and reasonableness of financial statements according to legal standards and regulations.

RSM Vietnam is a member of RSM Global, a network of audit and consulting firms ranked 6th globally in audit, tax, and consulting services. At RSM, we take pride in our team, which is trained both domestically and internationally, with extensive industry experience, ensuring that we provide reliable, detailed, and high-quality audit services to our clients.

After years of operation, RSM Vietnam has provided financial statement audit services to many large economic groups nationwide. Through the audit process, RSM Vietnam helps clients comply with the latest policies, address existing weaknesses, improve accounting systems, and enhance internal control systems, thereby improving financial management and business operations.