When Poor Audit Prep Becomes a Costly Habit

If you’ve ever sat through an external audit where findings piled up faster than coffee cups in the finance department, you know the pain.

It's not just about bruised egos or awkward emails from the board. High audit findings often point to deeper issues, typically rooted in a lack of preparation.

And when it happens year after year, it’s not an accident. It’s a pattern.

As a CFO, I’ve learned that external audits aren’t just a compliance checkbox. They’re an opportunity to show stakeholders that the house is in order. But according to a 2024 report from PwC, over 42% of finance leaders admitted their teams were only “somewhat prepared” or “not prepared at all” for their most recent audits. That’s nearly half of us walking into audits hoping for the best. Unfortunately, hope isn't a control.

What I often see is a reactive approach. The finance team scrambles a few weeks before the audit, pulling reports, fixing reconciliations, and cleaning up documentation. That last-minute hustle creates cracks that show up in missed controls, incomplete documentation, and inconsistent processes. And that’s exactly where findings tend to surface. The average organization deals with 10 to 15 audit findings per cycle, according to the Institute of Internal Auditors. High-performing organizations typically average fewer than five. The difference isn’t the complexity of the business. It’s the discipline behind the preparation.

Good audit readiness isn’t rocket science. It comes down to process ownership, monthly reconciliations that actually get done, and documentation that doesn’t live in someone’s inbox. It also means training your teams to understand the purpose behind the controls, not just how to check a box. More than anything, it requires leadership that treats audit readiness as part of the company culture rather than a once-a-year scramble. I’ve worked with companies where finance and operations met quarterly with internal audit to review controls and close gaps early. It wasn’t flashy, but it worked.

If audit prep feels like a painful sprint every year, it’s probably time to rethink the model. Partnering with experts, setting up an internal audit cadence, and investing in long-term process improvement can shift your organization from reactive to ready. When you're prepared, audits become a confirmation of good work rather than a discovery of what's gone wrong. And when there are fewer surprises in your findings, there’s a lot more confidence in your numbers from your board, investors, and regulators.