The Auditor Is Coming: How to Prep for January Audit Season

As the calendar flips to a new year, many organizations brace for one of the most high-pressure periods in the finance cycle: January audit season. Whether your team is tackling internal audits, responding to external auditors, or preparing for financial statement reviews, the weeks leading into January can make or break your audit readiness.

The good news? With the right preparation, you can turn audit season from a scramble into a streamlined, well-managed process. Here’s how to set your team up for success now, before the auditors arrive.

How to Prepare for Audit Season

1. Start With a Year-End Clean-Up

The strongest January audits begin with a focused effort in Q4. Before your team enters holiday mode, prioritize:

• Reconciliations (banks, AR/AP, payroll, intercompany)

• Accruals and cut-off reviews

• Fixed asset updates (disposals, impairments, additions)

• Inventory counts and variance explanations

• Supporting documentation uploads and tie-outs

  
  

This cleanup step reduces the likelihood of audit adjustments and helps your auditors move faster.

2. Review Prior-Year Audit Findings

Most audit surprises aren’t surprises at all. They’re follow-ups. Pull the previous year’s audit report and management letter, and identify:

• Recurring issues

• New controls that still need testing

• Policy or process updates that weren’t fully adopted

Then assign owners and deadlines. Fixing old issues before the auditors arrive shows operational maturity and boosts confidence in your financial reporting.

3. Strengthen Internal Controls Now

Auditors pay close attention to the control of the environment, especially in a year of economic volatility, staffing shortages, or rapid growth. Audit-season control checks may include:

• Segregation of duties

• Approval workflows

• Documentation standards

• Journal entry procedures

• Access and permissions review

• IT security controls

Address gaps early so you’re not rushing to create (or backdate) approvals in January.

4. Build a Centralized Audit “War Room”

A centralized digital hub keeps everyone aligned. Your audit room should include:

• PBC lists (prepared-by-client schedules)

• Workpapers

• Policies and procedures

• Evidence and approvals

• Audit timelines

• Assigned responsibilities

Platforms like SharePoint, Box, or your ERP’s document management module can keep everything organized and audit-ready.

5. Communicate Expectations with Your Internal Teams

Audit prep isn’t only a finance responsibility. Successful audits require collaboration across:

• Operations

• HR & Payroll

• IT

• Procurement

• AP/AR

• Legal

• Compliance

The earlier the communication, the smoother your January. Set expectations now:

• What information might auditors request?

• Who is responsible for what?

• What are the deadlines and turnaround expectations?

• How do we escalate issues quickly?

6. Anticipate Auditor Requests

January is fast-paced, and your auditors will expect you to be ready with answers. Some common January requests include:

• Rollforwards for AR, AP, inventory, debt, and equity

• Bank confirmations

• Legal letters

• Subsequent events testing

• New lease agreements for ASC 842

• Revenue recognition documentation

• Employee headcount or payroll registers

• Board minutes

Have as much of this prepared as possible now, especially if you know your audit has been time-consuming in the past.

7. Prepare Your Team for the Time Commitment

January is a heavy month, even without an audit. Set your team up with:

• Realistic capacity planning

• Adjusted deadlines

• PTO blackout windows (with communication far in advance)

• Clear prioritization

• Backup support for routine tasks

Audit season is a team event, so don’t leave your core accounting staff overloaded or burned out.

8. Conduct a Mock Audit (Optional—but Powerful!)

A dry run helps identify gaps before auditors call them out. Focus your mock audit on:

• High-risk accounts

• Significant estimates

• Areas with new transactions or accounting standards

• Any area with turnover or a new process owner

If you don’t have the internal bandwidth, external specialists can help you run a fast, effective pre-audit assessment.

9. Leverage External Staffing Support (When You Need It Most)

January deadlines don’t move, and short-staffed teams often feel the pressure the most. External staffing support can help you:

• Backfill critical accounting roles

• Perform reconciliations and clean-up work

• Support PBC list preparation

• Help run a mock audit

• Manage day-to-day accounting while your internal team focuses on the audit

• Provide experienced auditors or consultants to streamline your process

With the right support strategy, you can enter audit season prepared, confident, and ready to impress.

Invest Now for the Future

January audit season doesn’t have to be overwhelming. By investing time now in cleanup, communication, and collaboration, your organization can reduce risk, improve accuracy, and speed up the audit timeline. A proactive approach today can save weeks of stress in the new year and ensure you start 2026 with clarity and momentum.

---

BGSF Professional Services is becoming INSPYR Solutions: We provide flexible, on-demand finance and accounting expertise to help you close 2025 confidently and start 2026 with a clear financial foundation. Contact us today!