Many companies repeat the same mistakes every audit season.
They look small — but the consequences can be very expensive.

❌ 1. Not reconciling accounts receivable/payable on time

When auditors request confirmations, partners do not reply or figures do not match →
risk of expense disallowance and adjustments.

❌ 2. Inventory not counted

Warehouse reality vs. accounting books do not match →
inventory discrepancies = tax risks + internal fraud risks.

❌ 3. Wrong invoice period – incorrect timing of revenue/expense

A 1-month timing error affects the entire year:
misstated revenue – misstated expenses – loss of VAT credit.

❌ 4. Missing or incomplete original documents

Only soft copies remain, original contracts lost →
auditors & tax authorities may not accept them.

❌ 5. Payroll not matching labor contracts

Wrong allowances – wrong coefficients – wrong social insurance base →
high risk of back taxes and penalties.

❌ 6. Not closing monthly books

Leaving everything to year-end creates stacked errors →
financial data becomes unreliable.

❌ 7. Fixed assets not monitored – depreciation calculated incorrectly

Assets already disposed still depreciated, or new assets not depreciated →
distorted expenses and profit.

❌ 8. Incorrect cost classification

Welfare, advertising, sponsorship costs… but misclassified →
high chance of being disallowed by auditors or tax authorities.

❌ 9. Not preparing confirmation templates for partners

Waiting until auditors request →
delays the finalization of financial statements.

❌ 10. No prior discussion with the audit team

Not reviewing the PBC List beforehand →
discovering 20 missing documents at the start of the audit.