So you missed an audit deadline. Now what?

Avoid the pencils down approach. Instead, communicate proactively.

In a perfect world, audits would wrap on time, stakeholders would high-five, and covenants would be neatly tucked away for another year. But in the real world, even high-performing companies miss deadlines. Maybe it was bandwidth. Maybe it was scope creep. Maybe it was the perfect storm of events and transactions...

So now what? Here’s what you need to know — and do — if your audit deadline came and went before your final report did.

First, Know the Stakes

Most loan agreements or credit facilities come with financial reporting covenants. These typically include a requirement for independently audited or reviewed financial statements, compliance certificates, or other deliverables. And they’re usually tied to a post fiscal year-end deadline — commonly 90 or 120 days. Miss that window, and it’s not just an administrative headache. It can be, and often is, defined as an event of default. Yes, even if your business is performing well financially.

Step One: Communicate Proactively

Missing the deadline doesn’t mean the end, but silence can be.

Start by updating stakeholders early and clearly — anyone who relies on that audit needs to hear from you. Reset expectations on timing with your leadership team, your finance and accounting function, and your auditors.

If this is your first miss and your relationship with your bank or lender is solid, it’s unlikely to trigger a crisis. But if things have been strained — or your numbers show signs of stress — get ahead of it:

• Request a waiver in writing.

• Provide draft internal financials, including full footnotes.

• Include a traditional cash flow statement - even if it’s internal. Lenders use it for deeper insight.

Transparency buys goodwill. Delay rarely does.

Step Two: Beware Hidden Risks

Here’s what most CFOs don’t hear often enough: Missing a deadline usually means a temporary pencils down for a lot of folks involved. Most people are eager to deprioritize a late project oftentimes because it was inherently hard to begin with. That possibly includes your team and your independent auditor.

You need a plan to get pencils moving again. If you’re unsure of audit progress, use a bottom-up approach: assess who’s doing what, what’s left, and who needs unblocking.

Also, don’t overlook non-obvious stakeholders:

• Your landlord might need those audited financials for percentage rent calculations.

• A contracting officer might need them to confirm small business status for a pending award.

• Government agencies like DCAA or DCMA might already be watching.

If someone’s waiting on those numbers, be the one who picks up the phone first.

Step Three: Fix the Root Cause

Missing the mark is a symptom. Now it’s time for diagnosis.

Start with an honest debrief with your team and your auditor. This isn’t about assigning blame - it’s about alignment. Gather your internal team and your auditor for a structured post-mortem. Discuss bandwidth issues, such as key team members spread too thin or the existence of vacancies - temporary or not. Consider too, whether competing priorities pulled resources away from audit preparation. Is the audit scheduled alongside other audits without proper priority assessment?

Separately, assess communication breakdowns, such as whether the flow of information was delayed or needed multiple iterations. Was the necessary communication of significant, unusual transactions thorough, or were assumptions made that weren’t verified?

Lastly, consider process inefficiencies: Are your current workflows built for audit success or are they legacy systems that create friction? Is the scheduled timeline appropriate in light of the monthly close and payroll workflows?

Use this time to surface pain points you didn’t know were there. The goal is to create visibility across silos and establish shared accountability for better outcomes next time. Implementing milestones throughout the year to stay audit ready - not just audit reactive can be hugely positive.

If you treat audit hiccups as one-off fire drills, you’ll keep reliving them. But if you build intentionality into your financial reporting control environment, you can turn a setback into a strategic advantage.

The Executive Summary

Yes, deadlines matter. But response matters, too.

If you missed an audit deadline:

• Communicate proactively until the final deliverables are satisfied.

• Think beyond your lender — because someone else might be waiting, too.

• Put out the fire: Address the root cause.

Your audit may be late. But your leadership doesn’t have to be.