Making a List … And Checking it Twice!

Posted By Jonathan D. Moll, CPA

Audit Preparation List -Delaware Nonprofit CPA I consider the day after Thanksgiving the beginning of the “Season.” It’s one of my favorite days of the year. This year was no exception as I woke up extra early, long before the sun attempted to make its introduction to the day. As I took a deep breath of the cool autumn air, I could almost smell the excitement that the day had in store. The first one through the door, I wasted no time and I got started right away on the ‘lists’, one list for each and every audit client. Because to me, this day marks the beginning of audit season and there’s no time to waste when it comes to providing my clients with a list to help them prepare for their audit.

To my surprise, however, I recently found out that not everyone shares the same passion for the audit process as I do. In fact, some people actually consider it stressful to have their financial statements audited (I was insulted at first but have learned to not take it personally). During my years of practice as an auditor, I have experienced audits that have progressed smoothly and audits that haven’t. I’ve been able to compare these experiences and identify a few audit simplification tips based on characteristics that were commonly present during the “smooth” audits. The following tips should help result in less time invested by the nonprofit preparing for the audit and less disruption by the auditors during the audit process:

  1. Request a list of items that the auditor needs as soon as possible (definitely before the end of the fiscal year). If you can make copies of statements and account reconciliations for the auditors while you are preparing them and closing the books, it almost eliminates certain areas of audit preparation time.
  2. Have a meeting with the auditors before the audit begins. A simple meeting to discuss roles, responsibilities, and expectations will greatly reduce stress on both sides of the table. Contrary to popular belief, auditors don’t pride themselves in finding surprise issues that take extra time to resolve. A meeting is a great opportunity to find out what’s new and where the auditors are going to focus their efforts.
  3. Create an audit schedule. Human nature is to postpone doing the tasks that we dread. I’ve seen too often audit preparation postponed until the auditors arrive for fieldwork. This only leads to frustration for all involved.
  4. Put the auditor on your speed dial. Don’t hold back your questions if any of the auditor requests are unclear.

Having a clearer understanding of what the auditors need from you and when they need it will decrease the stress associated with preparing for an audit. Providing the auditors with as much information as possible ahead of fieldwork will help get them out of your office as fast as possible. And that’s a good thing, because they eat all of the doughnuts and drink all of the coffee when they’re there.

Photo By Mitchell Bartlett (License)

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