For many charities, an audit can feel daunting, particularly when finance teams are already stretched managing day-to-day operations. But with good preparation and clear communication, the audit process doesn’t need to be stressful.
A well-planned audit can provide valuable insight into your charity’s financial processes and help strengthen governance for the future.
At Caldwell Penn, we work closely with charities of all sizes and understand the unique pressures trustees and finance teams face. Here are some practical steps to help your organisation prepare for a smooth and efficient audit.
Does your charity need an audit?
The first step is to confirm whether your charity actually requires a statutory audit.
In England and Wales, a charity audit is generally required if:
- Annual income exceeds £1 million (rising to £1.5 million for accounting periods ending on or after 30 September 2026)
- Income exceeds £250,000 and gross assets exceed £3.26 million (increasing to £500,000 income and £5 million gross assets for periods ending on or after 30 September 2026)
- Your governing document requires an audit
- Trustees choose to have one carried out
There may also be additional legal or regulatory requirements depending on the type of charity or funding arrangements in place, so it’s important to review the rules carefully.
1. Make sure your financial records are organised
One of the biggest causes of delays during an audit is incomplete or difficult-to-access information. Organising records in advance will keep things moving once the audit is underway.
Income
Make sure documentation is available for all income streams, including donations, grants, fundraising income and legacies. Auditors will often need to review grant agreements, correspondence and supporting evidence.
Expenditure
Invoices, contracts, payroll information and lease agreements should be easy to locate and clearly filed.
Bank reconciliations
Ensure all bank accounts are fully reconciled and any outstanding items are clearly explained.
Fixed assets
Keep your fixed asset register up to date and ensure any additions, disposals and depreciation calculations have been recorded accurately.
2. Review your internal controls
Strong internal controls are essential for good governance and financial management.
Your auditor will want to understand how financial processes are managed within the charity, including approval procedures, segregation of duties and monitoring controls.
3. Communicate openly with your auditor
The more your auditor understands about your organisation before fieldwork begins, the smoother the process tends to be.
Early communication with your auditor can help avoid misunderstandings and ensure the process runs smoothly for everyone involved.
Some useful ways to improve the process include:
- Agreeing a realistic audit timetable in advance
- Discussing any new or unusual funding arrangements early
- Raising questions as soon as they arise
- Ensuring key members of staff are available during fieldwork
4. Prepare your team
Audits often involve multiple departments, not just finance.
Making sure staff understand what information may be requested, and who is responsible for providing it, can help avoid last-minute pressure and delays.
5. Keep track of audit requests
Having a clear system for managing audit queries and document requests can make a huge difference.
At Caldwell Penn, we use secure collaboration software to help clients track requests, upload documents and manage communication efficiently throughout the audit process.
How Caldwell Penn can help
An audit shouldn’t simply be about compliance. A well-run audit gives trustees greater confidence in the organisation’s financial position and helps identify areas for improvement before they become problems.
At Caldwell Penn, we see ourselves as an extension of your team. We work with charities throughout the year, not just at audit time, getting to know your processes and supporting your team well before the fieldwork begins.
