Preparing for Annual Audit — Checklist for Companies 2025

The annual financial audit does not have to be a stressful event. With adequate preparation, the process runs smoothly, and the risk of negative findings decreases significantly. Under Law no. 162/2017 on statutory audit, companies exceeding the legal thresholds are required to be audited.

This practical checklist, developed by the Geseidl team of auditors with over 22 years of experience, guides you step by step through your 2025 annual audit preparation.

Preparation timeline — when to start and what to prioritize

Ideal audit preparation begins at least 60 days before the auditor's visit. Companies that leave everything to the last minute face repeated requests for additional documents and extended deadlines that generate additional costs.

Prioritize bank reconciliations and supplier/customer balance confirmations first, then the physical inventory of assets, and finally the corporate governance documents (general assembly minutes, sole shareholder decisions). This order follows the materiality logic the auditor applies in substantive testing.

Documents the auditor will request (complete list)

Complete audit file preparation involves systematic collection of documents. The list below covers standard requirements under ISA 500 (Audit Evidence).

• Complete financial statements: balance sheet, profit and loss account, explanatory notes
• Monthly trial balance (January-December) and final synthetic trial balance
• Bank statements for all accounts (local currency and foreign), reconciled with accounting balances
• Cash register and cash inventory as of December 31
• Significant new or amended contracts during the year
• Annual inventory report (stocks, fixed assets, receivables)
• Tax returns filed with ANAF (D300, D100, D101, D390, D394)
• General assembly minutes, sole shareholder decisions, Board of Directors minutes

Mandatory reconciliations before audit

Reconciliation is the process of verifying that accounting balances correspond to reality. Article 7 of the Accounting Law no. 82/1991 (republished) mandates annual inventory of all balance sheet items. The auditor will test these reconciliations through direct third-party confirmations.

1. Bank reconciliation — bank statement balances vs. account 5121 as of December 31
2. Supplier balance confirmations — letters sent to top 20 suppliers by value
3. Customer balance confirmations — letters sent to customers with significant balances
4. Inventory reconciliation — physical count vs. accounting balances, with variance explanations
5. Fixed asset reconciliation — fixed asset register vs. accounting balances

Communicating with the auditor — what to expect

Effective communication with the auditor reduces the audit engagement duration by 20-30%. Under ISA 260 (Communication with Those Charged with Governance), the auditor is obligated to communicate significant findings, but you also bear responsibility for providing complete and timely information.

Designate a single point of contact from your finance team. This person should know the company's operations well and have access to all documents. Respond to requests within 2 business days — delays extend the audit and increase costs.

10 mistakes that delay the audit and how to avoid them

1. Missing documents — prepare the complete file before the first audit day
2. Unfinished reconciliations — complete them at least 2 weeks ahead
3. Physical inventory not conducted — schedule it in December, not January
4. Unprocessed transactions — verify no invoices or payments remain unrecorded
5. Accounting estimates without support — document the methodology for provisions
6. Post-balance-sheet events ignored — inform the auditor of any major change
7. Finance staff unavailable — ensure the chief accountant is present during the audit
8. Delayed confirmation responses — send confirmation letters early
9. Undocumented accounting policy changes — explain any change in the notes
10. No IT system access — prepare login credentials for the auditor in advance

Need professional financial audit? The Geseidl Consulting Group team, CECCAR Prahova leader for 18 consecutive years, is ready to help. Discover our services or contact us for a free consultation.