The keys to a painless audit

A number of organisations still view an audit as nothing more than a compliance obligation and disruptive administrative burden. However, through improved communication, better preparation and greater utilisation of technology, an audit can be a value-added and pain-free process.

The below tips will assist organisations in driving an efficient and effective audit process:

1. Communication

• Agree audit timetable, key dates and deadlines upfront with auditor

• Request a detailed requirements list from auditor

• Minimise likelihood of last minute surprises and adjustments by liaising with auditor throughout the year in relation to items such as one-off transactions, accounting treatment concerns and any proposed changes in accounting policies

• Have regular meetings and updates with the auditor throughout the audit process to discuss items such as status, outstanding matters and key issues

• Request formal feedback and recommendations for improvement from auditor at the completion of the audit

2. Preparation

• Address all items contained within audit requirements list

• Make any necessary year-end adjustments to Management Accounts to ensure accrual accounting-based concepts have been applied

• Provide auditor with reconciliations and supporting documentation for all key balance sheet accounts

• Provide auditor with explanations for key variances in the P&L when comparing current year results to prior year figures

• Update prior year’s Directors’/Committee’s Report (if applicable) and provide details of key changes such as appointment and resignation dates and number of meetings held and attended

• Provide auditor with copies of any new policies, procedures and key agreements

• Provide auditor with supporting documentation and calculations for notes to the accounts that are not covered directly via the Balance Sheet and P&L such as lease commitments, contingencies and related party transactions

• Review prior year audit adjustments and findings and consider and/or demonstrate areas of progress made

3. Technology

• Utilise a cloud-based accounting system

• Provide auditor with read-only access to accounting system

• Save and/or send all audit requirements electronically

To find out more about a painless audit process, feel free to contact us.

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