Audits may at times be time consuming, intrusive and stressful as you often have auditors come in for a week or two and disrupt your regular flow of work. However, there are a few things you can do to have a successful audit and help eliminate the stress that comes with having your audit done.
The genesis of a successful audit starts with learning from the past. Take a retrospective look at prior year audits to see if there were any major issues or problem areas encountered, and work on resolving them before the start of the audit. Review prior year audits for any audit findings or internal control recommendations and make sure these conditions are corrected. Also, make sure any recurring journal entries from prior year audits are posted to your general ledger prior to the start of the audit, as this will save both you and your auditor time and energy.
Communication is also always key to having a successful audit. Keep an open line of communication with your auditor during the year and seek guidance on any new standards or unusual transactions encountered. Your auditor will generally be receptive to answering your questions as they would rather you use the correct accounting treatment for these transactions the first time around instead of correcting it during the audit.
As the saying goes, “By failing to prepare, you are preparing to fail.” Preparation is one of the keys to having a successful audit. Audit preparation can be time consuming but, if done right, allows you to reap the benefits of having a stress-free audit. As part of preparing for the audit, you may want to do the following: i) Designate a point person for the audit. ii) Make sure your records are accurate, organized and up-to-date. iii) Make sure all year-end reconciliations are completed. iv) Make sure all documents requested in the planning memo are completed and ready by the start of the audit. Reach out to your auditor if you have any questions on the items requested. v) Make sure all schedules and work papers to be provided to the auditor agree to your general ledger and trial balances. vi) Make sure the draft financial statements is available on or before the start of fieldwork.
It is important to ensure that all key staff are available during the audit. Although most of the schedules and work papers may have been requested by your auditor prior to the start of the audit, they will always ask for additional information, including supporting documents and explanations. The availability of key staff will allow the audit to be conducted more efficiently and effectively.
Finally, try to occasionally get an open items listing and a status update from your auditor to track the progress of the audit and to consider any additional help you can provide in getting the audit completed successfully.
It is to everyone’s benefit that your staff is ready in advance. If you need advice, we have professionals who can help with your questions or concerns, especially before your audit begins. Please contact us for more details.