Five Tips For a More Efficient Audit
By William Haddad, Senior Manager, Assurance Services
If not managed properly, financial audits can be overly stressful and time-consuming. However, there are ways to alleviate stress and improve the audit process. One tried-and-true method is teamwork. Company leaders should consider teaming up with their auditors and applying some of the strategies listed below to achieve a successful audit:
1. Ongoing Communication Throughout the Year
Communicate, communicate, communicate.
Controllers and CFOs can feel overwhelmed by all the responsibilities they have on their plates. One thing that can help is staying engaged with your auditors and involving them in major transactions early in the process. Although there can be limitations on the extent of auditors’ involvement, they can discuss potential issues and point you in the right direction. This early involvement can save you the headache of delays and dealing with complex issues before the audit is in full swing.
2. Planning Kickoff Meetings
The more time you invest on the front end, the more time you will save on the back end.
Assuming all the major issues have been addressed and your auditors have been brought up to speed, focus next on the logistics of the audit and make sure everyone is on board with the expectations and timeframe.
Auditors typically provide companies with a list of requested items prior to the inception of the audit. Go through the entire list with a team member, discuss it with the auditors, and prioritize items accordingly. This way, questions can be answered early in the process and you can minimize the risk of submitting incorrect documentation.
Kickoff meetings are crucial to successful audits. These meetings are typically held at the beginning of the audit to discuss the overall strategy and plan. Since you kept the auditors engaged throughout the year, these meetings can be used to share additional thoughts and firm up the audit plan.
3. Set Up Weekly Status Meetings
As discussed above, having consistent meetings with your auditors is a great way to achieve a more efficient audit. Weekly status meetings can help you track the progress of the audit and ensure the plan is being executed. During these meetings you may ask the auditors to provide an overall status update on each audit area, and discuss audit findings and resolve potential issues.
4. Hire Staff with Public Accounting Experience
Although it’s not always feasible, companies should consider hiring at least one team member with a public accounting background. The audit process can be complicated and time-consuming, especially if the auditors are not receiving the information they need. Having somebody on your team with a public accounting background will not only ease communication and make the process smoother, but it will also help produce high-quality schedules with reasonable timeframes. That person can speak with the auditors and understand the requirements, and they will know exactly what to provide.
5. Consider Engaging an Audit Prep or Advisory Firm
If you want to succeed, you should know you cannot rule out professional help.
It is crucial to work with experienced professionals regardless of your industry. Often companies, especially startups, do not have sufficient time or resources to support the audit process. Therefore, companies will engage an outside firm to help them prepare audit requests. Outsourcing this task may negate the need for a permanent hire. Outsourced firms can assist with preparing financial statements and drafting technical memos (two tasks auditors are prohibited from performing for public companies). Using an expert can be very valuable and can result in timely and cost-effective audits.
Communication is key. If you communicate with your auditors, any issues you encounter should be nominal. I have been auditing companies for several years now, and most of the issues and delays we encounter are related to communication. Mistakes can be costly, so why not avoid them by applying the steps above?
There are several other ways companies can ease the burden of an audit. Consult your Marcum professional for additional insight.