We are often asked by our clients, “What do we need to do to prepare for an audit?” Of course, we usually ask in return, “What type of audit?”
The answer to our own question is what we like to call the BEAST – financial statement audits.
Keep in mind that the goal isn’t just to get through the audit; it’s about establishing efficient and effective workflow to keep your business running smoothly all year long. Although some of the nuances of one audit may differ from another, here are five less-apparent tricks of the trade that may help keep auditors happy.
- Accurate monthly reconciliations are key. Identify and resolve issues as they arise. Keep your auditor informed of major changes within the business or with your accounting. For example, don’t fill us in on a major overhaul of the chart of accounts when we show up to your office.
- Staff appropriately. Do you need to bring someone else on board? Dedicate hours to the audit and help your team juggle the audit along with their other obligations. Ensure key team members are present and focused during the audit up until the report is issued, or at least communicate any scheduling conflicts to your auditor. We are humans, too, and understand that people need vacations.
- Keep an Open Items list. These lists are not just for auditors. Maintaining a list helps you track if and when you sent something if someone asks about it, yet again. And, as a bonus, who doesn’t like marking something off their list?
- Accumulate files needed for the audit in a file folder throughout the year. If you’re not sure what the auditor will need, ask. You do not need to wait until the auditor is at your office to ask us questions. Our goal is to be your trusted advisor. It’s never a bad idea to send files early, either!
- Give your team members a purpose. They are invaluable to the audit and should know why the audit is important and what their role is. Once they have this information, they will likely be more willing to cooperate.
Presumably not too painful? Five bullet points – not bad for someone that makes their living in the details. Let’s get beyond the audit and back to business. Unless you’re an auditor too, of course. If that’s the case, we pointed out what you already know: the audit never ends.
Kristin A. Ryan, CPA, is an audit manager for PKF Texas. Contact her at 713.860.1400 or at kryan@pkftexas.com.