Is your organization ready for its year-end audit? Here are a few tips from an auditor than can help you prepare for a smooth and efficient audit:
- Get started early. The audit process starts well before year-end. Auditors begin evaluating internal schedules, contacting clients to discuss any changes and sending out arrangement letters months before the books are closed. It is never too early for you to start the conversation with your auditors. Reach out to your auditors if you have any questions during the year, but certainly in the month leading up to your year-end. Ask for a document request list, inquire if there are any new accounting standards that might impact the organization and start developing a timeline and assigning work across your team.
- Re-engineer the audit process. Auditors are always looking for ways to tweak audit procedures to be more efficient in obtaining audit evidence. Your organization can think along the same lines by identify an area of the audit that always seems to create heart burn. Have you struggled with identifying restricted contributions or pledges in the past? Then take some extra time leading up to the audit to focus on these areas. If you need some support, ask your auditors for clarification. Most auditors will be willing to educate you in a tricky area to help your organization.
- Hold yourself to a timeline. One of the biggest frustrations for an auditor is beginning fieldwork before an organization is truly ready. This is the main cause for delays, cost overruns and overall frustration on all ends. You can curtail this situation by following two rules: 1) do not agree to a fieldwork date unless you will be ready and 2) stick to that date. Auditors work diligently to meet deadlines and finish work within internal schedules. If you can do the same, it will make for a much less stressful process for all.
- Review your own work. Sometimes we all get a little too far into the forest to see the trees. Auditors are trained to perform a self-review of all work papers, financials statements and other deliverables and you should do the same. Make sure all of your schedules agree to the financial statements and you have documented all estimates made. Sometimes it’s better to set the work aside for a few minutes, hours or even days before performing the review. You will be surprised how often you will catch a little mistake that could cause a larger headache down the road.
- Hold exit interviews. After the dust settles, discuss what went well with your team and more importantly discuss any issues with the auditors. This is the time when any issues are fresh in your mind and it is better to hold these critical conversations earlier rather than later. Your auditor will appreciate the feedback prior to their wrap up meeting.
Hopefully these tips can help you have a successful audit this year. Need help? Contact us to discuss your specific situation and the ways we can assist your organization.