Common Audit Findings We See in Growing Businesses—and How to Fix Them Early

As businesses grow, financial complexity grows with them. New systems, more employees, increased transaction volume, and external stakeholders (lenders, investors, boards) all raise the bar for financial reporting and controls.

For many growing businesses, an audit—or even a first-time audit—can feel like a wake-up call. The good news? Most audit findings we see are common, predictable, and fixable—especially when addressed early.

Below are some of the most frequent audit findings we encounter in growing organizations, along with practical steps to remediate them before they become costly or disruptive.

The Finding

As companies scale, responsibilities often accumulate with a small group of trusted employees. It’s common to see one person handling multiple functions—such as initiating transactions, recording them, and reconciling accounts.

From an audit perspective, this increases the risk of errors or fraud going undetected.

How to Fix It Early

• Map out key transaction cycles (cash, revenue, payroll, AP)
• Identify incompatible duties within each cycle
• Implement compensating controls (management review, secondary approvals)
• Use technology to enforce approvals and role-based access

Pro tip: Even if headcount is limited, documented oversight can go a long way in reducing risk.

The Finding

Growing businesses often rely on informal processes. Account reconciliations may exist, but without consistent review or clear documentation of who prepared and approved them.

Auditors look not just for completion—but for evidence of review.

How to Fix It Early

• Standardize monthly reconciliation templates
• Require documented sign-off (initials, dates, comments)
• Establish clear close timelines and accountability
• Retain support in a centralized, secure location

This not only satisfies audit requirements—it improves internal clarity and accountability.

The Finding

As pricing models evolve (subscriptions, bundled services, retainers), revenue recognition often lags behind operational reality. This can lead to:

• Improper timing of revenue
• Inconsistent application of accounting policies
• Unsupported estimates or assumptions

How to Fix It Early

• Clearly document revenue streams and contract terms
• Align accounting policies with GAAP requirements
• Review contracts for performance obligations
• Train sales and finance teams on how deal structures affect revenue

Catching these issues early avoids restatements and uncomfortable audit adjustments later.

The Finding

Many growing businesses lack a formal month-end close process. Tasks are completed inconsistently, deadlines slip, and balances are reviewed reactively rather than proactively.

This can lead to:

• Late adjustments
• Increased audit time and fees
• Reduced confidence in interim financials

How to Fix It Early

• Create a standardized month-end close checklist
• Assign owners and deadlines to each task
• Perform variance analysis month-over-month
• Address reconciling items promptly

A disciplined close process is one of the most effective ways to reduce audit risk.

The Finding

Even when controls exist, they’re often undocumented. From an audit standpoint, undocumented controls may as well not exist.

This is especially common in first-time audits or when preparing for lender or investor scrutiny.

How to Fix It Early

• Document key controls by process
• Identify control owners and frequency
• Maintain narratives and flowcharts where helpful
• Update documentation as processes change

Strong documentation supports not only audits, but scalability and staff transitions.

Why Addressing These Issues Early Matters

Proactively addressing audit findings isn’t just about passing an audit—it’s about:

• Building trust with lenders and investors
• Improving operational efficiency
• Reducing disruption and cost during audits
• Positioning the business for growth, transactions, or exit

Many of these fixes don’t require significant investment—just intention, structure, and consistency.

How We Help

Our audit and assurance team works closely with growing businesses to identify risks early and implement practical, right-sized solutions. Whether you’re preparing for your first audit or looking to strengthen your internal controls, we help you move forward with confidence.

If you’d like to assess your audit readiness or discuss common findings specific to your business, we’re happy to help.