Are You Ready for Your Audit?

Virginia Sales and Use Tax Changes Effective July 1, 2013
June 25, 2013
Government Delays Major Requirement of Health Care until 2015
July 3, 2013

Are You Ready for Your Audit?

best practicesBy Rachel Squibb

Here are 5 Best Practice Tips on getting prepared for your audit:

  1. Don’t forget to reconcile your books to other subsidiary ledgers or bank statements.
    • Timely and accurate financial information is critical to making sound business decisions and providing accurate year-end reporting.
    • Keep proper supporting documentation.
    • Always have someone other than the preparer review the reconciliations.
    • Watch out for data error by taking your time and double-checking your calculations will keep you from making many common accounting mistakes.
  2. Plan and address potential problems ahead of time to reduce year-end workloads.
    • Learn lessons from prior year.
    • Consider work already performed by the entity or other reviewers/ auditors.
    • Discuss expectations about the impact of new accounting standards or changes to the business environment.
    • Create an “auditor file” to put information in during the year such as copies of new leases, debt, lines of credit, contracts, policies, and procedures. Having all these in one location will increase your efficiency in locating much needed documents.
  3. Set formal, documented and detailed procedures for accounting functions.
    • If the procedures are in writing and followed every time, it will save time and make it easy for another person to fill in if necessary.
    • Also, assessing control and fraud risks periodically will help find loopholes that may increase risk of fraud.
  4. Frequent meetings between management, staff, and auditors regarding items outstanding and importance and status of potential issues.
    • Perform a post-audit evaluation to determine weaknesses in the process and potential changes to approach in the future.
  5. And if you’re simply unsure about how to handle a financial matter or need help developing policies, talk with BCS. Being proactive is the key. Plan and put procedures in place to prevent kinks in the year-end closing and audit process.

Comments are closed.