Preparing for next year’s audit: What to consider going into 2026

The new year is just around the corner, and with the year ending, many CFOs and finance teams are thinking about 2026’s financial reporting and compliance requirements.  With the ongoing focus on strong corporate governance and financial reporting, the audit process is gaining more attention than ever before. Audit preparation is no longer seen as a box-ticking exercise, but rather a strategic opportunity to strengthen governance, improve data integrity and build operational resilience.

With regulatory changes, evolving IT and technological environments, alongside economic and political uncertainty affecting businesses of all shapes and sectors, early audit planning is essential. So, what should CFOs and finance teams prioritise now to ensure a smooth audit process next year?

Everything is fresh in mind straight after an audit completes: the challenges, the time-consuming areas and the auditor’s feedback. It’s valuable to use this window to conduct a debrief with your finance team, the audit team and other stakeholders. Some things to ask include:

• Which areas went well and of these areas, what do we need to ensure it repeats or with further enhancement can be performed better?
• Were there recurring findings in the management letter or audit committee report?
•  If so, how can these be addressed before year-end to add value to your business?
• What has changed in the business that can help the integrity of financial reporting and record keeping – can we share these with the auditors to enhance the audit?
• Do we have the right team in place with the capacity to deliver the audit alongside our business-as-usual activities?

Early reflection and early action allows you to create a practical roadmap for improvements without the pressure of looming deadlines.

Audit success depends on more than technical compliance; successful project management is also paramount. Treat the audit as a joint project between your team and your auditor. Identify key stakeholders early, including IT, finance and operational leads, and ensure they understand their deliverables and objectives.

Open communication is critical. If issues arose during the year, such as system errors or accounting misjudgements, raise, discuss and conclude on them proactively. Surprises discovered late in the audit process often lead to additional scrutiny from the auditors and alters the timetable. Transparency builds trust and enables you and your team to manage reporting deadlines and stakeholder expectations, allowing auditors to plan effectively. Furthermore, if there were areas that went well, then ensure they are flagged and shared.

In today’s world, financial data and operational technology underpin financial reporting, and regulators are paying closer attention to IT general controls within businesses. Standards such as ISA 315 have elevated the importance of access management, system updates and cybersecurity. Yet IT teams are often left out of audit planning conversations.

Align everyone early. Confirm any system changes, review access rights, and ensure documentation is up to date. Embedding good practices, such as uploading supporting documentation at the point of transaction, not only satisfies audit objectives and requirements but improves data integrity and IT resilience so that you can make business decisions quickly, accurately and helps to build robust business continuity processes.

The new year brings potential shifts in accounting standards for thousands of businesses, including updates to FRS 102. While adoption timelines vary, businesses should decide early whether to implement changes ahead of schedule. Discuss implications with your auditors to avoid last-minute requirements to pull together technical assessment papers and resource gaps to implement any required changes.

Similarly, keep an eye on sector-specific regulations in 2026. For example, HMRC’s increased scrutiny of R&D expenditure means eligibility criteria and capitalisation policies are under the spotlight for many tech companies.

Private equity transactions also require careful consideration.  Such transactions involve complex financial instruments and reporting requirements can be affected. Finance teams may be required to bring in additional support, such as valuation specialist. It’s imperative to address this early in the process.

Our experience strongly suggests that having a clearly mapped out approach to dealing with regulatory changes, and changes in your business as a result, will lead to a more effective and efficient audit process.

It’s crucial to always be thinking ahead. What did auditors request last year? Have those items ready from day one. Monthly or quarterly reconciliations, automated documentation uploads and consistent application of policies reduce year-end pressure and strengthen governance. These changes deliver commercial value beyond compliance by improving risk management and decision-making. Incorporating these in a practical manner, into your business processes, can enhance the scalability of your finance activities and ultimately value of your business for the long term

Likewise, many audit challenges stem from areas involving subjective judgments: complex transactions, financial instruments such as shares or loan agreements with embedded features such as warrants. These often require further thought and consideration, as a result investing in detailed technical papers outlining not just conclusions but the reasoning behind them will yield dividends. Preparing these early prevents bottlenecks later.

Other practical steps include:

• Prepare and reviewing going concern assessments before year-end, often best performed when you prepare your forecasts and budgets for the coming period
• Setting up secure document-sharing platforms, in collaboration with your auditors, to collate useful information, much of which can be shared with your auditors as audit evidence
• Providing auditors with direct system access, where appropriate, to reduce the administrative burden, and time, for your team

Economic uncertainty continues to influence audit objectives and priorities, particularly around complex valuations, investment appraisals and going concern assessments. For tech businesses, loan financing arrangements and share-based payments often require additional exploration. Across all sectors, cybersecurity is a growing risk, with implications for data accuracy and business continuity.

International transfer pricing is another area attracting major attention, as evidenced in the Autumn Budget 2025 announcements.  This is especially true for groups trading cross-border with international customers and teams in multiple locations, for businesses allocating management expenses and where the intellectual property of your business in one region generates value in another region. Ensure policies are documented and applied consistently to avoid future challenges from tax authorities.  Having a clear understanding and strategy for transfer pricing is also a valuable tax planning exercise that can unlock value for your business.

The audit has historically been viewed in part as a box-ticking exercise, but at S&W we're focused on turning this on its head and making the audit process itself a strategic opportunity to strengthen governance, improve data integrity and improve business resilience in uncertain times.

Preparation isn’t just about audit compliance; it’s about resilience and building a better business for the future.

Ready to make next year’s audit smoother and more strategic? Or perhaps you’re planning next year's audit but not quite sure if your auditors are being proactive enough. Get in contact with our audit specialists to discuss tailored audit planning for your business.