Want to Make Your Auditor Happy?
Posted on Wednesday, July 13, 2016
Most organizations do not usually look forward to their annual audit. Here are a few recommendations to help your audit go smoothly and make your auditor smile.
1. Document your internal controls.
We like to see documentation of your policies and procedures so that we know you have them in place. Make sure that you actually follow them.
2. Reconcile the beginning balances on the balance sheet with the prior year audited financial statements.
We like to start with good numbers. It makes our job a lot easier. If beginning balances do not reconcile to the prior year audit, then there’s usually additional work that needs to be done by the auditor, resulting in extra time.
3. Record year-end adjustments needed.
Take a look at your year-end financial statements. Do they make sense? Have all of the year-end entries been made? Are there any additional entries that should be made to correct errors made during the year?
4. Prepare an analysis of budget to actual and prior year actual to current year actual with explanations for variances.
Not only will this allow you to better understand your financial statements, but it helps the auditors understand what happened during the year that they may not be able to derive directly from the numbers.
5. Have requested documents available at the start of fieldwork.
You should receive a list of items needed for the audit a few weeks prior to fieldwork. There’s a reason that the auditors give it to you before they come onsite. If you have questions on items needed, make sure you ask your auditor before they arrive.
6. Prepare a work space for the auditors.
We’ve worked in all types of places. As long as we have enough outlets, we are usually content.
7. Be available.
The auditors will have questions and will need to speak with staff during fieldwork. Make sure that staff are available. Not being available will most likely cause delays in the audit process.
8. Be prepared.
The better prepared you are makes for smoother fieldwork, and possibly a shorter period of time spent with your auditors.
Posted by: Carrie Minnich, CPA
Posted in Mission Minded Nonprofits
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