Getting ready for an audit can be a challenging and intimidating process, but most delays and issues are preventable. Early planning and clear organization can make the audit preparation process more efficient, help adhere to the audit timetable, and create a more positive experience for both the auditee and the auditor. The key to a successful audit is preparation that takes place long before fieldwork begins.
1.) Start early and set a timeline – Assign tasks well in advance of scheduled fieldwork. Establish an internal timetable with specific dates for posting closing adjustments and preparing audit schedules with supporting documentation. Meet often as a team to review audit progress and hold each other accountable for the internally established due dates.
2.) Reconcile accounts, organize documentation, and review work – Ensure that major accounts are reconciled and supported with proper documentation. Verify that journal entries are reviewed with documented approval. Organize supporting documentation in a manner that is well labeled and easily accessible. Auditors perform audit work in a specific order, so not having all schedules available at the start of an audit can lead to inefficiencies. Also, auditors must issue audit findings for material auditor-identified adjustments, so an extra review is warranted.
3.) Review prior year audit findings – Auditors are required to follow-up on prior year audit findings, so verify that corrective actions have been implemented and can be clearly demonstrated.
4.) Understand new accounting standards or changes – If applicable, ensure that the organization has a basic understanding of new pronouncements and their impact on the financial statements. Discuss implementation strategies and clarify audit impact with the audit team early on to avoid misunderstandings and audit delays.
5.) Communicate proactively – Open communication is essential. Discuss all questions, known issues, and complex transactions with the audit team in advance. This builds trust, can minimize audit findings, and allows auditors to plan accordingly.
6.) Assign a central contact person – Designate a knowledgeable primary contact within the organization to coordinate audit requests. This helps to avoid confusion and duplications of effort, and it ensures that audit requests are handled promptly.
7.) Ensure availability of key personnel – Audit efficiency depends on timely access to key personnel and records. Remind accounting and grant program personnel to prioritize the audit and be readily available during audit fieldwork. Make sure that
scheduled meetings, trainings, and vacation days are minimized. Delays often occur when auditors cannot get timely responses to questions or requests.
8.) Maintain a positive outlook – Be open to feedback and recommendations. View the audit as a collaborative opportunity to strengthen internal controls and processes of the organization.
While audit preparation can be challenging and intimidating, a successful audit depends on clear communication, organization, readily available audit information, and adherence to the audit timetable. Early preparation is the key to minimizing disruptions and establishing audit efficiency for everyone involved.