How to build audit resilience into your company’s DNA

Millions of chief financial officers lead their organization’s annual financial statement audit—a critical process that underpins long-term growth. A well-executed audit builds investor confidence, fuels innovation and supports strategic execution. Yet the process can be complex and demanding.

Rather than striving for a perfect audit, CFOs should focus on building a resilient one—comprehensive, rigorous and adaptable to change. With the right approach, the audit can be smoother, more efficient and consistently delivered on time and on budget.

What a resilient audit looks like: Preparation, communication, continual improvement

Building resilience into the annual audit process means maintaining strong governance and risk oversight within your company year-round. Your internal systems should be able to adapt to your circumstances, whether due to business volatility, rapid growth, operational disruption or regulatory change.

The following three elements are key to building a more resilient audit.

1. Preparation: Work with your audit firm to develop new approaches to internal financial control, including scenario planning and proactive risk identification. The goal is to anticipate disruptions and build rapid response capabilities.
   Maintain careful documentation, train your finance team, invest in automation and analytics if possible, and reach out to external resources for support with systems and processes where needed.
   
   
2. Communication: Keep your audit firm informed of key financial and operational changes throughout the year. To build the right audit strategy, your auditor needs to know of new revenue streams, technology changes, business expansion, key agreements, mergers and acquisitions, debt modifications, and other events that impact your financial statements. The sooner they know, the better they can plan.
   
   
3. Continual improvement: Work with your audit firm to continually improve the audit through an annual audit debrief process.
   In the most successful models, once the audit is completed, both the company and the auditor hold internal meetings to review the process and identify what went well and what needs improvement. Then they come together to share their perspectives and decide what to build into next year’s audit plan.

How your company can support audit resilience

You can maximally support your audit process by strengthening internal financial control systems to align with your company’s needs, industry, growth trajectory, set of stakeholders and reporting obligations. Key building blocks include:

• Strong governance: Evaluate the entire structure of financial controls and clearly define who owns each area. Make sure operational leaders across your organization, not just in finance, understand their control responsibilities. Ownership fosters accountability and embeds audit awareness and readiness in the business.
• Documentation: Make sure your control systems are properly documented using a combination of process narratives, flowcharts and control matrices. Scale them as needed. Poor documentation is one of the most common and easy-to-fix weaknesses that can undermine both internal financial controls and the annual financial statement audit.
• Technology prioritization: Use automation to streamline processes where possible. Even simple tools like workflow management systems and cloud-based document stores that allow you and your auditor to share information can improve coordination, reduce errors and support remote audits.
• Training: Cross-training isn’t just for auditors. By cross-training individual team members in multiple disciplines and business areas, companies benefit by building a finance team that can cover multiple roles. This helps to prevent single-point failure, spread organizational knowledge and mitigate the disruptions of employee turnover.

How your audit firm can support audit resilience

Your external auditors can be a powerful resource in helping you build a resilient audit process—if you have a strong relationship with them. If the relationship is merely transactional and you engage with them only briefly once a year, it’s a missed opportunity. Here’s how to shift the dynamic:

• Initiate discussions with your audit firm about best practices. Ask what tools and protocols they and others are using and how you can integrate them efficiently.
• Share your modernization goals. Let them know you’re open to change and value their insights.
• Seek their input on optimizing internal controls. Often, they are experts in your industry sector and know what others are doing. Use that knowledge.
• Evaluate their innovation credentials. Are they using artificial intelligence, data analytics, secure document-sharing portals and real-time dashboards? Do they use document-sharing portals to facilitate the flow of information between auditor and client? If not, ask why.

The best audit firms will be happy to build a modernization roadmap with you. And if they won’t—or can’t—it might be time to reconsider the fit.

Traits of CFOs who have built resilient audit cultures

Company CFOs who’ve led resilient audit transformations often do it this way:

• Link audit to strategy. Rather than treating audit as a back-office compliance function, these CFOs align audit priorities with strategic objectives. They understand how a well-executed audit can build stakeholder confidence and fuel strategic execution. For instance, if entering a new market is a priority, they assess related compliance, tax and cyber risks and share their findings with their audit firm.
• Engage beyond finance. These CFOs actively involve operational leaders within the company in the audit process. They ensure that financial control and documentation are seen as a businesswide shared responsibility and not just a finance problem.
• Invest in people and tools. They don't treat the audit process as a checkbox. Whether it’s hiring skilled financial personnel, engaging a co-sourcing partner, or deploying a GRC (governance, risk and compliance) platform, they allocate the resources needed to do the job well.
• Keep the board informed. Audit-conscious CFOs value transparency and ensure that audit findings and updates are regularly shared with the audit committee or board. This reinforces the importance of governance and demonstrates leadership commitment.
• Embrace change. Audit resilience is ultimately a mindset. CFOs who succeed in this space are comfortable with not having all the answers. They don’t wait for perfection—instead, they are proactive, learn fast and continuously improve.

Shifting the mindset

Building resilient internal systems to support the annual audit process can help protect a company, strengthen its growth and build stakeholder trust. For a CFO, it requires shifting the company’s audit mindset from reactive to proactive, from compliance-only to value-added.

Start with a candid audit self-assessment and build a plan tailored to your size, risks and growth stage, working with your auditor to make your audit an early warning system for your company, not a rearview mirror.