What Auditors Notice First: Insights from an Audit-Ready Finance Panel
When we hosted our panel From Close to Confidence: Designing an Audit-Ready Finance Operation, I expected the conversation to focus on documentation, checklists, and year-end crunch. Instead, the conversation kept circling back to one simple thing: most audits do not get difficult because of obscure accounting rules. They get difficult because of what auditors see and feel right away.
Long before testing starts, before samples are pulled or controls are reviewed, auditors are already deciding how much confidence they have in a finance team. Not based on effort or responsiveness, but based on what the reporting environment looks like when they first step in.
That perspective came through clearly from our panelists:
- Jim Norton, CPA, Senior Product Manager at Velixo and former auditor and CFO
- Jake Morris, CPA, Partner, Client Accounting & Advisory Services at Whitley Penn
- Mark Tessar, CPA, CIA, Audit Senior Manager at GRF CPAs & Advisors
- Heather Tausig, CPA, FPAC, Director of Finance at Firewire Surfboards
Although they sit on different sides of the audit table, they kept describing the same early signals of whether an audit will run smoothly or if friction will show up quickly.
Auditors Are Not Auditing Effort
Jim Norton framed this early in the discussion with a reminder that many finance teams learn the hard way.
“Auditors don’t audit effort. They audit evidence, consistency, and control.”
Safe to say, many in the audience and myself deeply empathized with that statement. Teams work late, turn requests quickly, and still feel like the audit drags on.
From the auditor’s point of view, effort does not reduce risk. What reduces risk is seeing information that looks reliable every time it shows up. That is why auditors start paying attention to reporting patterns almost immediately.
Consistency Is One of the First Things Auditors Notice
Mark Tessar described how quickly inconsistencies become visible from his auditor perspective.
If reports change format every month, or if balances are presented differently depending on when they are requested, it creates uncertainty. Not because auditors assume something is wrong, but because inconsistency usually points to reporting that is being rebuilt instead of reused.
In practice, this shows up as:
- Different layouts for the same report
- Different answers to the same question
- Outputs of reports that depend on who prepared them
Even when the numbers make sense, inconsistent reporting slows reviews and leads to more follow-up. When structure and logic stay the same, auditors gain confidence faster.
Whether Support Exists or Has to Be Recreated
Jake Morris described a pattern he sees often when audits become painful.
The problem is rarely missing data. The problem is that supporting schedules are not part of the normal close. They only exist because the auditor asked for them.
That means every request kicks off a rebuild. Data gets exported. Spreadsheets get reworked. Differences get reconciled under pressure.
Auditors pick up on that quickly. It tells them something important: the reports being reviewed are not part of the normal close process. They exist only because the audit demands them.
In contrast, when teams can open an existing reconciliation or roll forward and refresh it, the tone of the audit changes. Fewer follow-ups. Faster reviews. Less stress on everyone involved. This way, auditors can focus on testing instead of understanding how something was assembled.
Reconciliations That Actually Explain the Balance
Heather Tausig spoke from the finance operator side about what makes reconciliations work during audit.
Auditors are not just checking that reconciliations tie. They are trying to understand what the balance represents and how it moved over time.
Reconciliations that clearly explain those movements are easier to review and inspire more trust. Reconciliations that require side conversations or tribal knowledge slow things down.
Auditors notice very quickly whether a reconciliation can stand on its own or whether it needs explanation.
96% of People Still Use Excel. Excel is Not the Enemy.
During the webinar, 96% of the audience answered that they still rely on and use Excel for their reporting. Excel is familiar, but how do auditors feel about Excel?
Our panel unanimously agreed that auditors are NOT against Excel. Many prefer reviewing Excel because it is familiar. The issues is uncontrolled and disconnected spreadsheets.
Here are the common red flags:
- Heavy copy and paste
- Hard-coded numbers with no clear source
- Files that cannot be refreshed consistently
However, when Excel is used in a structured, disciplined way, it works extremely well for both finance teams and auditors. The tool is not the problem, how it’s used is.
The First Weeks Tell Auditors a Lot
Beyond specific reports, auditors pay attention to how the early part of the audit feels.
Do teams know where information lives?
Can they respond without recreating work?
Are answers consistent from one request to the next?
Both Mark and Jake emphasized that early calm is not accidental. When the first weeks feel chaotic, it usually points to fragile reporting processes, not a difficult audit.
Why These Signals Matter
None of these signals show up as formal findings. But together, they shape how auditors approach the engagement.
When reporting is consistent, reconciliations are clear, and support already exists, trust builds quickly. Reviews move faster. Conversations stay focused.
One of the clearest takeaways from the panel: When those signals are missing, audits slow down even if no major issues exist. The work becomes harder than it needs to be.
Want to Hear the Full Conversation?
If this sounds familiar, the full panel discussion is available in the on-demand webinar From Close to Confidence: Designing an Audit-Ready Finance Operation.
The webinar includes examples from auditors, advisors, and finance leaders, along with a free downloadable audit readiness guide and checklist to support your team.