Hiring guide
Audit preparation: what a fractional CFO can organise, and what remains with the auditor
By CFO Index · Published
A fractional CFO can help your team deliver organised, traceable information for an audit. That does not make the CFO the independent auditor or turn a completed checklist into assurance. Define the preparation work separately from the auditor's engagement, with a named management owner for decisions and sign-off.
Start from the engagement, not a generic checklist
Confirm the entity, reporting period, framework, timetable and requested information with the appointed auditor. ICAEW's explanation of UK audit communications describes the engagement letter as establishing the audit scope and the respective responsibilities of management and auditor. Use the terms applicable to your own jurisdiction and engagement; do not assume every business in this directory needs a statutory audit. Ask local advisers to resolve whether an audit is required, who may perform it and any independence issues before work begins.
Use statuses that do not confuse preparation with acceptance
Maintain one request register tied to the auditor's current list. A useful sequence is requested, assigned, prepared, management-reviewed, sent, queried and response sent. Track the auditor's response separately. An uploaded file is not necessarily accepted evidence, and a lack of follow-up does not establish that the audit area is complete. The table below is an illustrative internal workflow, not a prescribed audit programme.
| Request | Preparation check | Owner and review | Status boundary |
|---|---|---|---|
| Year-end receivables schedule | Entity, cutoff and total agree to identified ledger version | Accounting preparer; CFO checks reconciliation | Management-reviewed, not auditor-approved |
| Inventory listing | Location, count date and adjustments are identified | Operations supplies records; finance reconciles | Open differences remain visible |
| Estimate support | Assumptions, source dates and management decision are documented | Relevant manager owns inputs and approval | Auditor evaluates evidence independently |
| Revised trial balance | Approved journals bridge old and new versions | Accounting posts; authorised management approves | Notify auditor which schedules changed |
Tie the supporting schedule to the right ledger
Hypothetical example: a year-end receivables export totals €126,000, while the agreed ledger balance is €128,000. Investigation finds that a €2,000 manual invoice was excluded by the export's document-type filter. Correct the export rule, retain the original file and issue a labelled replacement that reconciles to €128,000. Do not plug the difference into a balancing row or delete a transaction just to make totals agree. If the cause is unresolved, disclose the difference and its owner. Reconciliation establishes a traceable population; it does not prove that all receivables are recoverable.
Keep management judgements separate from document collection
The CFO may coordinate an estimate, challenge assumptions and prepare supporting analysis within the agreed mandate. Record who in management owns the underlying judgement and who has authority to approve it. ICAEW's communications guidance identifies management's responsibility for financial statements and describes requests for evidence that can develop during fieldwork. Do not treat an external finance provider's involvement as transferring every management responsibility to that provider, or promise that the auditor will accept a treatment before evaluating it.
Handle changes without losing the audit trail
For each revised schedule, preserve its request ID, previous version, reason for change, reviewer and date sent. If an approved journal changes the trial balance, identify the affected schedules and communicate the replacement set. Keep unresolved questions in the tracker rather than inside private email threads. Use the agreed secure exchange channel and approved access rights. For requests requiring auditor-controlled procedures, coordinate with the auditor instead of substituting internally prepared material and presenting it as independent evidence.
Agree what completion of the CFO assignment means
A practical handover includes reconciled schedules within the agreed scope, a current request register, a changes log and a list of unresolved matters with owners and deadlines. Test that another authorised team member can trace a sample schedule to its ledger and supporting records. These are preparation acceptance tests, not audit tests. ICAEW describes an audit as providing reasonable rather than absolute assurance; organising the files provides neither an audit opinion nor a guarantee of one. Do not make a clean opinion or a fixed audit fee reduction the promised outcome of the CFO's work.