The fastest way to a 3-week statutory audit close is to prepare in March, not in May. This is the readiness checklist we hand to clients in mid-March every year - covering ledgers, schedules, confirmations and the new CARO 2020 disclosures.
Trial balance and ledgers
Sign off the trial balance by 5 April. Reconcile every control account: debtors, creditors, bank, GST input/output, TDS payable, salary advances. Each control should tie to its sub-ledger to the rupee.
Run a year-on-year ratio analysis at TB level - gross margin, debtor days, creditor days, fixed-asset turnover. Auditors will run this regardless; doing it first lets you explain variances proactively instead of defensively.
Bank and balance confirmations
Issue bank confirmation requests to all banks by 10 April. Confirmations to top-10 debtors and creditors go out by 15 April. Build a tracker - auditors will ask, and 'we sent it last week' is not an acceptable answer in May.
Fixed assets and depreciation
Physical verification by 25 April. Reconcile the asset register to the GL. Ensure useful-life policy under Schedule II is consistently applied and disclosed. Disposals during the year need profit/loss-on-sale workings tied to bank receipts.
CARO 2020 disclosures
CARO 2020 expanded clauses around loans to related parties, registration of charges, internal financial controls, wilful defaulters and undisclosed income. Pre-populate every clause with management's response and supporting documents before the auditors arrive. This alone cuts audit time by a week.
About the author
Ganesh
Senior Advisor at Regikart. Want to discuss this in the context of your business?