February 26, 2019
7 Tips for a Successful Audit
It’s crunch time! Another audit season is before us, and this time of year can be the most frantic time for business professionals. In my experience, I have found that a little preparation and organization can go a long way toward facilitating a successful audit process, minimizing audit adjustments and surprises, lowering your audit fees in the future, and getting more value out of the audit process.
Here are some helpful tips and best practices to ensure your process goes smoother than ever:
Request, the Prepared by Client (“PBC”) list from your auditor at least a month in advance of the beginning of field work. Whether this is your first or twentieth year with this auditor, the last thing you want is to be surprised by what is being asked.
Also, make sure all the requests are clarified before you start work. Don’t assume you understand what is being requested and why. Ask the auditor for clarity if you’re unsure, and don’t be afraid to ask why something is being requested if you feel it’s unnecessary or not applicable. This can save both sides a lot of time.
Assign work appropriately
Any reconciliations/roll-forwards/supporting schedules should be owned by people that know they are responsible for that GL account/group of accounts. Many of the supporting items should’ve been completed as part of the year-end close process, so make sure everyone is clear on that. The last thing you want is work being overlooked, or worse, multiple people doing the same, and often conflicting, work.
Start a digital data room
Using a digital data room will allow you to share the PBC files, or leverage that of your auditor. It is also important to make sure everyone is clear on a consistent naming convention for files so they are easy to find. Emails back and forth are a recipe for failure when trying to ensure that items don’t get lost or missed in the daily shuffle.
Set up a calendar
Any successful project starts with buy-in from the team completing the work, and a calendar is a great way to capture due dates for all the items to ensure more accountability and buy-in from your team. Make sure that you review the calendar with each team member prior to beginning work, and add some buffer into the schedule in case something takes longer than anticipated.
Communicate, communicate, communicate
Your whole organization needs to know and understand that audit requests are the priority for finance and accounting professionals during this time of the year, unless other requests become imperative. Outside regulatory and time-sensitive diligence requests, internal and board requests are a few things that could take precedence. It is also important to be careful with time and commitments, as closing the year and the subsequent audit require a lot of time from any accounting and finance organization. Set everyone up for success and help to manage expectations by making sure you keep other commitments during this time to a minimum.
Provide daily updates
Make sure to provide regular updates to the team so they are well aware of the progress being made. If work is running behind schedule, the Controller and sometimes the CFO, need to help prevent roadblocks and bottlenecks.
As soon as the audit is complete, perform a post mortem debriefing with the auditors and your team (preferably separate) to see what needs to be better anticipated or adjusted for next year. Some discoveries of a post mortem may include that supporting documents need to be stored in an improved, systematic way so that they are more readily accessible. Or it could include automating PBC reports or formalizing process documentation around auditable activities.
BRINGING IT ALL TOGETHER
Auditing is a highly complex process. Use these helpful tips as a checklist to make your process more efficient and more profitable than ever. If you must move onto other initiatives, it would be wise to seek seasonal or temporary help, rather than overpromising/underdelivering, and consequently burning out your team. Depending on the complexity of the initiative, you may need consulting help. The last thing you want is to fail in some critical initiatives like integrating an acquisition, or implementing an ERP, because the organization’s attention is spread too thin.
HOW BRIDGEPOINT CAN HELP
Is audit preparation taking your staff away from priority projects and initiatives? Preparing for your annual audit can be stressful, and the cost of a misstep could be high. Bridgepoint provides audit preparation services to help you protect and add value to your business. Let our experienced team relieve this burden. Get in touch today!
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