Internal Controls That Protect You During Year-End Audits

As year-end approaches, audits and financial reviews become a reality for many Alaskan businesses. Whether it’s an external CPA review, a lender request, or an internal compliance check, having the right internal controls in place can make all the difference.

At MCAC, we’ve seen how strong internal controls not only prevent errors and fraud, but also make audits faster, smoother, and far less stressful. Here’s how to ensure your business is protected and prepared before the auditors arrive.

Why Internal Controls Matter More at Year-End

During an audit, your financial systems are put under a microscope. Auditors want to see that you’re not just recording transactions, but that you have procedures to verify, approve, and safeguard them.

When your controls are weak or undocumented, even small issues can raise red flags. Strong internal controls show auditors and your leadership team that your financial reporting is reliable, and your business is well-managed.

The Most Critical Controls to Review Before Year-End

Every company’s systems are different, but a few key areas are universal. As you prepare for audit season, focus on these essential safeguards:

1️⃣ Segregation of Duties

No single employee should control every step of a transaction. Divide responsibilities for authorization, processing, and reconciliation. Even in small teams, tools like approval workflows or external reviews can help create checks and balances.

2️⃣ Documented Policies and Approvals

Make sure expense approvals, reimbursements, and purchase authorizations are written, consistent, and followed. Auditors look for evidence that policies aren’t just in theory, they’re practiced.

3️⃣ Monthly Reconciliations

If your accounts aren’t reconciled regularly, you’ll spend precious time catching up during the audit. Monthly reconciliations of bank, credit card, and payroll accounts reduce discrepancies and keep your records audit-ready.

4️⃣ Access and Data Security Controls

Who has access to financial software, payroll systems, or sensitive records? Review permissions, update passwords, and restrict access based on roles to minimize risk.

5️⃣ Review and Sign-Off Procedures

A second set of eyes: whether from management, a bookkeeper, or a Fractional CFO, provides oversight that auditors appreciate. It shows accountability and reduces the chance of oversight.

How These Controls Protect You

When your internal controls are strong:

• Your documentation is already organized for auditor review

• Fewer follow-up questions and rework are needed

• Errors and inconsistencies are caught before submission

• Your audit timeline and costs shrink dramatically

  
  

Auditors notice preparedness. It’s the difference between a stressful process and a streamlined, professional one.

MCAC’s Role in Audit Preparation

We work alongside Alaskan businesses to design and implement practical internal controls, right sized for your team and budget. From refining approval processes to setting up reconciliation routines and documenting workflows, we ensure your systems tell the right story: that you’re in control.

Year-end audits don’t have to be intimidating. With strong internal controls, you’re not just ready for review, you’re proving the strength and integrity of your business.

📞 Need help evaluating your internal controls before year-end? MCAC can help you prepare, protect, and simplify the audit process from start to finish.