As we close out the year, many of us are excited for winter holidays and to ring in a new year; however, some of us in the accounting space may be nervous about something scary around the corner – another audit! Don’t worry, we devised a guide to help you prepare for audit of financials and set yourself up for success in the next year. Here are three ways you can start to prepare for audit:
1. Establish a Clear Timeline
Establishing a clear timeline when you prepare for audit is critical to meeting key deadlines and holding both parties accountable. Understanding when audit requests, or PBCs, are expected to be delivered, field work begins and when audit work is expected to be completed help ensure timeliness in the financial audit process. Get with your auditor ahead of the audit to setup expectations and agree on reasonable dates for deadlines throughout the course of an audit. Think through any unique transactions or new business processes that you’ll want to update the auditor on ahead of time so they can start to gain an understanding and identify the appropriate audit procedures.
2. Understand What Files or Reports are Being Requested
One of the main causes for delays in an audit are due to improper files provided or omitted files not being provided to an auditor. Get with your auditors ahead of the audit to make sure your team understands the PBC list and that the list is comprehensive. Identifying where to access specific files or what parameters to use to generate specific reports ahead of time can help save you time and headache during the audit. Referring to prior years data is always a great way to help familiarize yourself with the previous requests and files provided.
3. Get Organized
To prepare for audit requires a significant amount of data exchange and communication so it’s important to be organized to avoid delays and bottlenecks. Work with your auditors ahead of the audit to determine a process for delivering data or tracking communications & status. Also ensure proper delegation of audit requests and oversight within your teams. Setting a priority for specific requests or specific areas of the audit can help team members ensure they are keeping the audit team working efficiently while resources are scheduled.
In summary, the key to a success often lies in how you prepare for audit. Establishing a timeline, understanding what files and reports are going to be requested and getting organized are three ways you can start to prepare ahead of time. Audits are an unavoidable, necessary part of the world we live in that helps bring security to the free markets so its important to embrace them and do what you can to make them as easy as possible.
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