A financial statement audit can be a significant time burden on the finance/accounting department for any organization. There is often a large time commitment needed from getting ready for the auditors, gathering information requested during the audit, answering questions, etc. However, there are ways to make the audit go smoother. The following are four ways to help make the audit easier for both the organization and the auditors.
- Be Prepared Prior to the start of audit fieldwork, the auditors should provide you with a schedule request. If all of these items are ready at the start of the audit, it goes a long way in making the audit move at a much quicker pace. This will also help decrease the amount of time needed by your accounting staff once the audit begins. There will be other items the auditors need, and if the initial list is completed prior to the auditors arrival, it will cut down on the items on the subsequent lists and free up time for your accounting staff during the audit.
- Set Expectations Make sure to talk with your auditors and let them know what your expectations are of them including certain important dates and deadlines. When are your final financial statements due and to whom? When you do you need a draft of the financial statements to review? Is there a meeting (Audit Committee, Board of Directors, etc.) at which the financial statements need to be presented and when is it? By letting the auditors know of these dates ahead of time, it should prevent a scramble to meet deadlines for both you and the auditors.
- Keep the Auditors Informed It can be easy to forget about significant events or unusual transactions that occur during the year. It can help the audit go smoothly if you let the auditors know about anything new or significant that occurred during the year. This could be a new entity that needs to be audited, a new line of business, unusual transaction, debt refinance, etc. This communication with the auditors doesn’t only need to happen at the time of the audit. Don’t hesitate to email or call your auditor when something significant occurs and let them know what happened or to ask about the proper accounting treatment.
- Be Responsive The amount of items needed for an audit can be overwhelming at times. However, nothing can stall an audit more than being unresponsive to the auditors questions and requests. The auditors understand you have other work to do besides getting them information. However, trying to respond to them as quickly as possible goes a long way in keeping the audit moving forward. The one thing all these items have in common is communication. By communicating with your auditors frequently, and following the steps above, there is no reason next year’s audit couldn’t be your smoothest one ever!