Anticipating your First Financial Audit and What to Expect

person looking at a financial audit and a magnifying glass.

Laura Langner

Laura Langner has advised clients on a variety of accounting matters such as audit preparation and support, budgeting, budget to actuals, and forecasting including cash runway, and long-range planning. She has also guided clients through operational matters such as HR and payroll matters, corporate and health insurance renewals, systems implementations, and developing processes and policies. Many of Laura’s clients are in the clinical trial stage.

Anticipating your First Financial Audit and What to Expect

If a financial audit for your life science company is looming large on your calendar, there are steps you can take now to make the process easier and more efficient before it even begins. With the right auditor and some basic preparation, a financial audit can solidify your company’s credibility and set you up for long-term success. 

Choosing the right auditor for your biotech company

All financial auditors are not created equally, and the one that suits another company best may not necessarily work for yours. Before selecting an auditing firm for your biotech company, it is important to consider their specific industry expertise and how that aligns with your company’s future goals.

Biotech is a highly specialized niche, and any auditing firm that you may hire needs to understand the nuances of the industry. Do they understand the life cycle of a biotech company, and where you fall within it? Do they understand who the intended reader is of your financial statements and how to cater to that audience? Will they act as a partner to your company and help guide you through the audit and beyond? 

Selecting the right auditor for your biotech company may seem daunting, but the care that you put into this decision can set your company on the right track for years to come. At Browne Consulting, we work exclusively with life science clients. This has allowed us to build relationships with audit firms from Boston to the Bay Area who truly understand the ins and outs of the industry. We work closely with our clients, VC firms, and auditors to set expectations, build a strong working relationship, and ensure a smooth audit process from the very beginning. 

Preparing for your first audit

Once you have selected the right audit partner, it’s time to prepare for the audit itself. You will need to compile your financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and organize any pertinent records. The audit process can become very time consuming very quickly, and it is important to forecast how it will affect your day-to-day workflow. Will your company designate a team to spearhead the biotech financial audit process? How will the audit process impact other major priorities in store for your company this year?

If your biotech company can’t spare a portion of the team to prioritize the audit and address any unforeseen issues as they arise, or if you are not in a VC network with connections to high-quality service providers, then partnering with a life science accounting firm to handle the audit process can alleviate that burden. By bringing on an experienced partner to navigate your company’s first audit, you will have an expert on hand to know what questions to ask, what pitfalls to avoid, and what technical tasks to check off your list to set yourself up for success.

The financial audit process

Although our team is one hundred percent committed to life science clients, it is composed of professionals from a wide array of disciplines. At Browne, we have CPAs who have come from public accounting and have served on audit teams. We have employees who have worked in the biotech and other industries and have been on the receiving end of an audit. Our team has undergone the audit process with a large portion of our clients, ranging from first time Series A audit, through preparing for an IPO, and can cater the process to the unique needs of your company. 

A successful audit can be of enormous value to your biotech company, both solidifying your credibility and setting you up for success with potential investors. Whether you are undergoing an audit to meet financing requirements, or to meet your company’s goals for future growth, choosing the right auditor and properly preparing for the audit can make or break the process. At Browne Consulting, we help life science companies offload the audit process and strengthen their financial future

 

Recently named Top Places to Work in 2023 by Boston Globe, Browne Consulting is an industry leader in life science accounting solutions that set the standard for providing operational finance and accounting support to next generation science and technology companies. Their top-caliber professionals deliver best-in-class services, enabling clients to focus on breakthrough solutions such as financial planning and analysis support (FP&A), operational accounting, tactical HR support, and more.

Inspired by an agile process for over 100 venture backed life-science companies, Browne Consulting’s expert professionals are ready to address their clients’ greatest challenges by providing flexible, on-demand solutions and support. To learn more about Browne Consulting’s innovative expertise, please visit www.BrowneConsulting.com.