Audits don’t have to be stressful events. In fact, an audit can be a valuable and beneficial resource for your company. All it takes is a little preparation.
Before your audit begins, you will receive a client assistance listing from your engagement team. This document will contain the majority of the items that will be needed to perform the audit. There may be other document requests that come after, but this compilation is what the team needs to get started. Once you get this listing, review and compile all of the requested documents.
Having everything prepared and ready to go on the first day of fieldwork will benefit you in three main ways.
- You will ensure that all of your account details reconcile with the trial balance. During your information gathering for the client assistance listing, make sure all of it ties to the general ledger. If any adjustments are needed to reconcile accounts, post them right away so the trial balance received by the engagement team is as accurate and up-to-date as possible. A best practice is to have a CFO, controller, or other financial executive review all reconciliations prior to providing them to your auditor.
- Early review and preparation provides you with ample time to reach out to the engagement team prior to the start of fieldwork with any questions or concerns about the information on the client assistance listing. In fact, don’t hesitate to reach out to your engagement team throughout the year if you enter into any significant transactions such as a new debt agreement, a purchase or sale of a business, or implementation of new accounting software. Open communication and early recognition of these items will help the year-end audit go much smoother.
- Perhaps most importantly to a busy entrepreneur or executive, taking the steps outlined above means that when the engagement team arrives, they will be able to hit the ground running. This means they will come to you less often with housekeeping or records related questions, leaving you more time to focus on daily responsibilities. You will only have to make yourself available for more complex questions or to provide additional supporting documentation as needed.
Thorough and early preparation can position you to get the most out of your audit experience. Your auditors can assure you that your financial information is true and fair, and they can also provide ideas and feedback on ways to improve processes, internal controls and overall efficiency.
At RKL, our audit professionals provide information and feedback to our clients throughout the year, as part of our effort to deliver value beyond compliance. To learn how our team can provide you a strong foundation for protecting the good standing of your company, visit our assurance services page.