Preparing for an Agricultural Audit: What to Expect 

Audits can feel intimidating, especially when they involve complex agricultural operations. But with the right preparation, an audit doesn’t have to be stressful—it can be an opportunity to improve your financial controls, clarify records, and strengthen your business. 

Whether you’re facing a government compliance audit, a financial statement review, or an internal inspection, knowing what to expect will help you navigate the process with confidence. 

What Is an Agricultural Audit? 

An agricultural audit is a thorough examination of your farm’s financial records, operations, and compliance with applicable laws and regulations. It can be requested by lenders, government agencies, or conducted internally to assess risk and accuracy. 

Audits vary in scope but often include: 

• Verification of income and expenses 

• Review of inventory and asset records 

• Examination of internal controls and procedures 

• Compliance checks for grants, subsidies, or tax credits 

Common Types of Agricultural Audits 

• Financial Statement Audits: Independent auditors verify the accuracy of your financial statements, which may be required by lenders or investors. 

• Tax Audits: The IRS or state tax authorities review your tax returns and supporting documentation for accuracy and compliance. 

• Regulatory Audits: Agencies like the USDA may audit compliance with program requirements or environmental regulations. 

• Internal Audits: Self-assessments or reviews by your team to identify operational or financial risks before external audits. 

How to Prepare for an Agricultural Audit 

1. Organize Your Records
   Make sure all financial documents—bank statements, receipts, invoices, payroll records, and tax filings—are complete, accurate, and easy to access.
2. Review Your Internal Controls
   Document and review your financial processes, including cash handling, inventory tracking, and expense approvals. Strong internal controls can simplify the audit and reduce questions.
3. Communicate with Your Auditor
   Clarify the audit scope and timeline upfront. Ask what documents or information they will need, and designate a point person to coordinate communications.
4. Prepare Your Team
   Ensure staff understand their roles and the importance of timely, accurate responses. Train anyone who interacts with auditors on professionalism and transparency.
5. Address Potential Issues Proactively
   If you identify errors or discrepancies ahead of time, document corrective actions taken. Being upfront about issues demonstrates responsibility and can build trust.

What to Expect During the Audit 

Auditors will typically: 

• Conduct interviews with key personnel 

• Inspect financial records and supporting documents 

• Test transactions for accuracy and compliance 

• Identify any discrepancies or risks for follow-up 

Remember, auditors are not there to catch you out—they want to ensure your records are accurate and your business is compliant. 

After the Audit: Next Steps 

Once the audit is complete, you’ll receive a report detailing findings and any recommended actions. It’s important to: 

• Review the report carefully 

• Address any deficiencies promptly 

• Implement improvements in policies or controls as advised 

• Keep detailed records of corrective actions 

How DBC Supports Agricultural Audits 

De Boer, Baumann & Company has extensive experience guiding farms through all types of audits. From preparation to response, we help you understand requirements, organize records, and implement controls to make the process as smooth as possible.