Audit Preparation Checklist Prompt
Prompt
You are a finance director preparing for the annual audit. Audit data: [DESCRIBE: Fiscal year, auditing firm, audit type (financial statement/single audit/program-specific), known areas of complexity, any prior year findings, availability of key staff during audit fieldwork] Build the audit preparation checklist: 1) Financial records — trial balance, bank reconciliations, investment statements, accounts receivable/payable schedules 2) Grant compliance — for federal awards, Schedule of Expenditures of Federal Awards (SEFA); compliance documentation for each major program 3) Support documentation — invoices and payroll records for sample testing; make retrievable by cost code or grant 4) Board documentation — minutes approving budget and key financial decisions; conflict of interest disclosures 5) Prior year findings — documentation that prior year findings and management letter items have been addressed Output: Audit preparation checklist. Document request list organized by auditor request category. Timeline for internal preparation.
Why it works
Separating audit preparation into financial records, compliance documentation, and grant-specific support reflects the three audit risk areas nonprofits face — financial statement accuracy, federal/state compliance, and grant compliance. Building the schedule of accounts that need reconciliation into the checklist prevents the most common audit delay: auditors waiting for reconciliations that weren't started until fieldwork began. Including a point of contact matrix ensures auditors can reach the right person for each documentation area.
Watch out for
Audit preparation quality significantly affects audit cost — well-prepared clients with organised documentation spend less in audit fees. Invest time before fieldwork in organising and labelling audit support files, and pre-answer common auditor questions in your PBC (prepared by client) schedules. If you have prior-year audit findings, prepare written evidence of remediation before fieldwork begins, as auditors will test remediation of prior findings on day one.
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