10th-Nov-2025 • Isaac Kennedy • SME Audit Preparation
For small and medium enterprises (SMEs) in Kenya, an audit can be a nerve-wracking experience. However, with proper preparation, you can ensure a smooth process that demonstrates your business's transparency and financial health. Here's a step-by-step guide to help you prepare for an SME audit.
Familiarize yourself with the audit process, including the types of audits (financial, compliance, or performance) and the expectations from the auditor. This understanding will help you gather the necessary documents and information efficiently.
Ensure that all financial records are accurate, complete, and up-to-date. This includes income statements, balance sheets, cash flow statements, and tax returns. Store these documents in a secure, accessible location for easy retrieval during the audit.
Gather supporting documents such as receipts, invoices, contracts, bank statements, and payroll records. These documents help provide evidence for transactions listed in your financial records.
Review your internal controls to ensure they are effective in preventing errors, fraud, and misstatements. This includes segregation of duties, authorization procedures, and reconciliation processes.
Identify any potential issues or discrepancies within your financial records and develop solutions to address them before the audit. Communicate these solutions clearly to the auditor during the audit process.
Designate a contact person who will liaise with the auditor throughout the audit process. This individual should be knowledgeable about your business's financial records and internal controls to efficiently respond to any queries or requests from the auditor.
After the audit, review the findings and recommendations provided by the auditor. Address any issues raised and implement changes to improve your business's financial management and internal controls. Regularly update your records and follow-up on any outstanding matters.