How to Prepare for Your 2026 Financial Statement Audit: A Checklist for Philippine Companies
To prepare for your 2026 financial statement audit, engage your auditor before year-end, close your books by mid-January, and have your schedules and supporting documents ready before fieldwork starts. The income tax return is due April 15, 2027, and the SEC accepts only financial statements already received by the BIR. A company that starts in March usually files late. This checklist shows what to prepare and when.
Who needs audited financial statements for 2026?
BIR test: gross annual sales, earnings, receipts or output of more than ₱3 million (Section 232(A), Tax Code).
SEC test: total assets or total liabilities of more than ₱3 million, or being a public interest entity (SEC Memorandum Circular (MC) No. 4, s. 2026).
Corporations below the SEC test still file unaudited statements with a sworn Statement of Management's Responsibility. See our AFS guide.
What are the deadlines?
BIR: the annual income tax return for calendar year 2026 is due Thursday, April 15, 2027. Audited statements are attached to it.
SEC: the baseline is 120 calendar days after year-end, which is April 30, 2027, unless the SEC sets other dates. In 2026 it did.
Order of filing: BIR first, then SEC. The SEC accepts only statements stamped received by the BIR or with the BIR's eAFS confirmation (SEC MC No. 9, s. 2026).
See the compliance calendar for the other dates.
What should you do before December 31?
Engage the auditor and sign the engagement letter. Agree on the scope, the timetable, the reports you need and the fees.
Check the auditor's accreditation. Every auditor needs Board of Accountancy accreditation. Some companies also need an auditor accredited by the SEC, the BSP or another regulator. See accredited auditors explained.
Confirm your reporting framework. It depends on your total assets and liabilities. See our PFRS guide.
Plan the inventory count. Invite the auditor to observe it, and keep the count sheets.
Send confirmation details. Give the auditor the names and addresses of your banks, major customers, suppliers and lenders.
What should be ready by mid-January?
A final trial balance and general ledger for 2026.
Bank reconciliations for all accounts as of December 31.
Schedules of receivables and payables, with aging.
A fixed asset register with additions, disposals and depreciation.
The inventory list and count summary.
Loan agreements and a schedule of balances and interest.
A list of related parties and transactions with them.
Payroll summaries that agree with your withholding returns.
Tax returns filed for 2026, with proof of payment, and all BIR Form 2307 certificates you will claim.
Minutes of board and stockholders' meetings, and new major contracts.
Which problems delay an audit most?
Books not closed. The auditor cannot start on moving numbers.
Sales that do not match tax returns. Reconcile sales per books with your VAT or
percentage tax returns before fieldwork.
Missing Form 2307. Without the certificate, the tax credit is at risk.
Unsupported related-party balances. Prepare contracts and computations.
Late bank and customer confirmations. Send requests in early January.
The wrong signatories. The Statement of Management's Responsibility must be signed under oath by the right officers (SEC MC No. 4, s. 2026).
What does the auditor need from management at the end?
A signed Statement of Management's Responsibility.
A management representation letter.
Approval of the final financial statements by the board.
After that, file with the BIR, then with the SEC through eFAST. Keep your books and records for the period the law requires. See how long to keep tax records.
Frequently asked questions
Can our auditor also prepare our financial statements?
Avoid it. The auditor must stay independent of the statements being audited.
When should we start?
Before year-end. Auditors' calendars fill up from January to April.
What if we file late with the SEC?
Fines apply. See SEC penalties for late AFS filing.
Sources
National Internal Revenue Code of 1997, as amended, Section 232(A)
SEC Memorandum Circular No. 4, Series of 2026 (Securities and Exchange Commission)
SEC Memorandum Circular No. 9, Series of 2026 (Securities and Exchange Commission)
Republic Act No. 9298 (Philippine Accountancy Act of 2004)
Looking for an accredited external auditor?
Our assurance practice is accredited with the SEC and BSP (Class C) and audits financial statements for SEC and BIR filing. See our audit and assurance services.
You can also email info@aureadalaw.com or call (02) 8812-9990.
Related guides
This article is general information as of its publication date, not legal advice, and does not create a lawyer-client relationship. For advice on your situation, consult a lawyer.
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