Companies facing a first audit often ask their new auditor to help them get ready for it. It is a reasonable instinct. The auditor knows what they are going to look for, so who better to tell you what to have waiting.
The answer is that almost anyone else would be better, and that is not modesty. It is a rule, and the reasoning behind it matters more than the rule itself.
The threat has a name
When a firm prepares the records and judgements it is then asked to audit, the result is a self-review threat. The auditor is forming an independent opinion on their own work. Every incentive that makes an audit useful, the willingness to challenge a number, to reopen a question, to say that a provision is wrong, runs against the natural reluctance of anyone to find fault in something they built.
This is not a hypothetical concern invented by standard setters. It is the mechanism behind a long run of audit failures, and it is why the FRC’s Ethical Standard in the UK, the IESBA code internationally, and the equivalent Canadian provisions all restrict the same combination of services.
What the restriction actually covers
The strictness depends on who you are.
For a listed company or another public interest entity, preparing the accounting records or the financial statements is simply not available from your audit firm. There is no safeguard that makes it acceptable.
For a private company the position is narrower than most people assume rather than wide open. Assistance that is genuinely routine or mechanical can sometimes be provided with safeguards, which in practice means separate teams, separate review, and documented consideration of the threat. The moment the work involves judgement, which is to say the moment it becomes the useful part, it stops being mechanical and the threat returns.
The practical test is simple enough to apply yourself. If the work involves deciding something, your auditor should not be the one doing it.
What your auditor can still do
Plenty, and it is worth asking for.
They can give you a detailed prepared-by-client list, early, and talk you through it. They can tell you which areas they expect to focus on and why, which is the single most useful piece of information in planning your year end. They can explain what evidence they will need for a particular judgement, without forming the judgement for you. They can tell you that your revenue recognition policy will be a focus area, leaving you to document it.
What they cannot do is write the position paper, build the reconciliation, or prepare the statements and then opine on them.
Who does the preparation
Three options, in rough order of how often they are the right one.
A separate firm with technical accounting capability. This is the common answer for a first audit or a year end where something significant has changed, because the work is concentrated and then it is done. The firm doing it should be willing to hand over to your auditor directly rather than leaving a report on your desk.
An internal hire, if the work recurs. If every year end is a reconstruction exercise, the problem is not a missing adviser, it is a missing controller. Readiness work that finds the same twelve items every January is telling you something about the finance function rather than about the audit.
Nobody, if your records are already in order. Some companies do not need this. A business with monthly reconciliations that someone independent reviews, contracts filed in one place and judgements documented when they are made is already audit ready, and should decline to pay anyone to confirm it.
What to ask before you engage anybody
Ask your auditor, in writing, what assistance they are permitted to give you and which category your engagement sits in. Get the answer before you need it, not in February.
Ask any readiness provider whether they also audit. If they do both, ask them which one they are offering you, and treat an answer of “either” as a reason to look elsewhere.
Ask what the output is. A readiness exercise should end with a list of specific items, each with what is missing, what evidence closes it, who owns it and when it is due. Advice in the abstract does not survive contact with a January deadline.
The firms that find audits straightforward are rarely the ones with the simplest businesses. They are the ones who worked out early who was responsible for what, and did not ask one party to do two jobs that are meant to check each other.