Many business owners assume that once the bookkeeping has been completed and the trial balance is ready, the accounts can simply be submitted for audit review. However, in practice, that is not always enough.
Before the accounts are submitted for audit, it is often necessary to make audit-related adjustments to ensure the financial information is complete, accurate, and properly presented.
These adjustments are not meant to “complicate” the accounts — they are an important step in preparing the company’s financial statements for a smoother and more efficient audit process.
In many cases, making the necessary adjustments before audit review begins can save time, reduce queries, and avoid unnecessary back-and-forth later.
What Are Audit Adjustments?
Audit adjustments are accounting entries made to correct, update, or complete the financial records before the financial statements are finalised.
They are usually identified during:
- year-end closing
- account review
- management account preparation
- pre-audit checking
- audit fieldwork preparation
These adjustments help ensure the accounts reflect the true financial position of the company.
Why Are Audit Adjustments Necessary?
Even if the company has maintained bookkeeping throughout the year, there are often items that still require year-end review.
This happens because accounting records are usually prepared based on:
- available invoices and documents
- routine monthly entries
- preliminary classifications
- timing of transactions
However, for audit purposes, the accounts need to go one step further — they must also be:
- properly supported
- accurately classified
- complete as at year-end
- compliant with accounting requirements
This is why audit adjustments are often necessary before the audit review begins.
Why It Is Better to Adjust Before Audit Review Starts
I. It Helps Present a More Accurate Set of Accounts
Submitting incomplete or unadjusted accounts can result in financial figures that do not fully reflect the actual year-end position of the company.
For example:
- expenses may be understated
- liabilities may be missing
- fixed assets may be incomplete
- revenue may be overstated or understated
- depreciation may not be updated
Why this matters:
If the accounts are not adjusted first, the auditor may need to spend more time identifying obvious issues that could have already been corrected beforehand.
A more accurate draft account means the audit review can focus on verification and finalisation, rather than basic clean-up work.
II. It Reduces Unnecessary Audit Queries
One of the biggest reasons clients feel an audit is “taking too long” is because of repeated audit queries.
In many cases, these queries arise simply because the accounts were submitted before basic review and adjustments were completed.
Common examples:
- accruals not recorded
- prepayments not adjusted
- depreciation missing
- bank reconciliation not updated
- fixed asset additions not included
- old balances not cleaned up
Why this matters:
If these items are adjusted before audit review starts, the auditor will usually raise fewer avoidable questions.
That means:
- less back-and-forth
- faster response process
- smoother finalisation
III. It Helps Avoid Repeated Changes to the Financial Statements
When adjustments are made only after the audit review has already started, it may lead to multiple revisions of the draft financial statements.
This can become time-consuming for everyone involved.
What often happens:
- draft accounts are prepared
- audit starts
- adjustment is identified
- accounts are revised
- tax schedules are affected
- supporting schedules need to be updated again
Why this matters:
Every additional revision increases:
- time spent
- risk of inconsistency
- chances of missing linked changes elsewhere
By making the main adjustments early, the financial statements become more stable and easier to review.
Final Thoughts
Submitting current year accounts for audit review without first making the necessary adjustments may seem faster at the beginning — but in reality, it often causes more delays later.
A proper review before submission helps ensure that the accounts are:
- more accurate
- more complete
- easier to audit
- easier to finalise
Ultimately, audit adjustments are not just about compliance. They help ensure that the company’s financial statements present a clearer and more reliable picture of the business.
Good preparation before audit review can make the entire process more efficient, less stressful, and more manageable.