09/10/2026
"Do I need an audit to sell my company?"
Not as a requirement, no. But it comes up almost immediately anyway.
Listen in as Brian E. Lawyer, CPA, answers (or read more below).
One of the first things a diligence firm does is ask to review your audit or review work papers. It's expected in the industry, and "we've never had one" is a slower answer than sellers think.
Q: Who asks for them, the buyer or my own team?
A: Both. The seller's diligence firm wants to see the work papers, and the buyer's team will want them as part of the purchase process. So this isn't a document you produce once for one audience.
Q: Why work papers instead of the financial statements?
A: Because the statements are the output. The work papers show you already went through the process of supporting your balance sheet amounts to an outside auditor who was paid to question them. That history is what a buyer is actually reading.
Q: When should you start preparing for due diligence?
A: Several years before a potential transaction. Both of the clients I'm working with right now had been through an audit or review for years before anyone was at the table, and it shows.
Q: What do diligence teams focus on?
A: Internal controls, always. Accounting policies generally, and revenue recognition in particular. Starting early gives you time to clean up the accounting rather than explain it under deal pressure.
