If you’ve ever sat across the table from an auditor and thought, “Why are they asking this?”, here’s the truth. It’s not curiosity, it’s assurance.

Every question connects to accuracy, risk, and compliance. Auditors don’t just tick boxes. We test truth and transparency.

Understanding the “why” behind each question can turn an audit from a stressful process into a strategic opportunity to improve systems, detect risks early, and build credibility with banks, investors, and the FTA.

So here are the Top 10+ Questions Auditors Ask SMEs and What They Really Mean.

1️⃣ Can you share your Trial Balance and supporting ledgers?

Every audit starts with your accounting backbone, the trial balance. We check whether the numbers reconcile and whether accounts are properly classified as per IFRS, not Excel logic.
Documents auditors ask: Trial balance, general ledger, chart of accounts, adjusting entries, and closing journal entries.

2️⃣ How do you recognize revenue?

Revenue is not just “money received”. It is about when and how it is earned, governed by IFRS 15. We review contracts, invoices, and delivery terms to ensure the timing and recognition are accurate.
Documents auditors ask: Sales invoices, customer contracts, delivery notes, and revenue recognition policy.

3️⃣ Are there any related-party transactions?

After the introduction of UAE Corporate Tax, this question has become crucial. We are not being nosy; we are checking for arm’s-length principles, transfer pricing compliance, and disclosure accuracy.
Documents auditors ask: List of related parties, intercompany agreements, management confirmations, and loan details.

4️⃣ Do you have confirmations for receivables, payables, and loans?

Numbers tell a story, but third-party confirmations prove it. We verify balances independently to ensure reliability. A missing confirmation is like a missing witness in a trial.
Documents auditors ask: Debtor and creditor lists, customer and supplier confirmations, bank letters, and loan statements.

5️⃣ How do you value your inventory?

We check whether stock is valued at cost or net realizable value, whichever is lower. Overstated stock means overstated profit, and that is a red flag.
Documents auditors ask: Inventory listing, valuation method, year-end stock count sheets, and ageing reports.

6️⃣ What are your provisions and accruals?

Sound financials are built on completeness and prudence. We ensure expenses are recorded when incurred, not when paid, and that provisions reflect probable liabilities.
Documents auditors ask: Expense accrual schedules, pending invoices, provision workings, and legal or warranty claim details.

7️⃣ Do you maintain a Fixed Asset Register and depreciation schedules?

Assets don’t just exist; they depreciate, get replaced, or retire. We verify capitalization policies, depreciation methods, and impairment reviews as per IFRS.
Documents auditors ask: Fixed Asset Register, purchase invoices, insurance, and disposal records.

8️⃣ How are shareholder drawings and personal expenses treated?

Mixing business and personal transactions is the quickest way to distort profitability and attract tax risk. We ensure owner transactions are properly accounted under capital or current accounts, not operating expenses.
Documents auditors ask: Bank statements, shareholder current account, and management expense records.

9️⃣ Have you reconciled your VAT returns with your books?

If your VAT returns and general ledger do not match, neither will the FTA. We cross-check VAT on sales, purchases, and adjustments to ensure accuracy and compliance.
Documents auditors ask: VAT returns, detailed VAT reports, reconciliation statements, and tax invoices.

🔟 What are your subsequent events or contingencies?

Events after the balance sheet date such as a major collection, lawsuit, or loan default can change how your financials are viewed. We assess these to ensure your statements reflect all known facts, not just those at year-end.
Documents auditors ask: Updated bank statements, legal correspondence, and post-year-end management reports.

Additional Questions Auditors Commonly Ask

11. Do you have management approvals or board minutes for key decisions?
12. Have you performed bank reconciliations and reviewed unpresented cheques?
13. Are employee salaries, end-of-service benefits, and gratuity properly accrued?
14. Have you complied with AML and Corporate Tax filing requirements?

Documents auditors ask:
– Bank reconciliations
– Payroll summary and gratuity calculation
– MOA, AOA, and trade license copies
– AML questionnaire and compliance documents
– Corporate Tax registration and return copies

The Real Purpose Behind These Questions

Auditors don’t ask questions to find fault. We ask them to find fairness and to certify it. An audit is not an inspection; it is a diagnostic process, a mirror that reveals both strengths and opportunities. A transparent audit builds trust, strengthens financial discipline, and helps your business grow with confidence.For transparent and value-driven audits, contact Hallmark International Auditors & Accountants