Successful audits hinge on communication and documentation. As such, preparing for an audit can either be an easy or daunting task depending on your experience and the state of your financial records. Wegner CPAs is committed to making the audit process be a positive experience.
Here are the secrets from an auditor’s perspective
- Obtain the audit preparation list from your auditor. This is a vital communication tool detailing all the items needed for the audit. Additionally, ask your auditor to clarify uncertain items. If you know of new items that aren’t on the list, reach out to your auditor and ask them if they want more information.
- Compile all the documentation and items on the list within the timeframe requested by the auditor. This could include deposit slips, invoices, bank and investment statements, loans, lease agreements, email correspondence, and schedules you’ve prepared for the account balances. When you are gathering all the documentation, ask yourself the following question: “How can I prove that the numbers on our books are accurate?”
- Be available during audit fieldwork. It is important to ensure that you and other key staff are available to the auditors. Although the auditor has all the documentation to look at, there will be some follow-up questions and additional support that might be needed. They will also have general inquiries to discuss with you.
- Monitor internal controls during the year. The auditor will want to discuss your organization’s internal control process and look at documents to ensure that controls are in place. Controls are designed to prevent and detect fraud and even human error. Some vital controls include bank statement and reconciliation review, approval of purchases, offering count procedures, and dual-control over the mail process.
- Provide feedback after the audit. After completing the audit, consider ways to improve the process whether it be moving the timing of the audit, preparing more documentation ahead of time, improving the audit preparation list, or performing the audit remotely. Reach out to your auditor and discuss these to have an even smoother audit next year.
Overall, an audit begins and ends with communication by confirming you are preparing the correct documentation on a timely basis, being available for questions, and finding ways to improve each year. If you have tips to share from successful audit experiences, we’d love to hear from you!