This article was written by Matthew Grazen, CPA, Manager at The Bonadio Group.
It’s time for your annual audit. This may be a stressful time and a cumbersome process for many, but it doesn’t have to be! Below are some items to consider to ensure a smooth, stress-free process for both your team, as well as the auditors.
Pre-audit communication is a driving force behind a successful, pain-free audit. Whether this involves sharing preferences, managing expectations, or asking for clarification on audit requests, open lines of communication are vital to ensuring an efficient audit. Pre-audit communications will express what your team needs in order to make it through the audit process efficiently. This includes sharing whether you want the audit to be in person or remote, preferred methods of contact (email, phone, etc.), and preferred frequency of calls. These pre-audit discussions also provide a time to share an in-depth analysis of current year activities. Providing details about your organization’s performance throughout the year will help your auditor to customize audit procedures in an effective manner, reducing the number of requests and time spent on the audit. In addition, this will also help reduce the needed time commitment from your team in support of the audit.
Establishing, agreeing on, and adhering to deadlines is a very strong tool for both your organization and the audit team. Deadlines will ensure that unwelcomed surprises do not arise during the audit process as well as allow for transparency and accountability. In the end, both parties are working toward a common goal, so establishing and adhering to deadlines will help keep the audit on track. Examples of deadlines include when the audit request list will be provided, audit requests will be filled, financial statement drafted, and so on.
While everyone is busy and has important work to complete, being available is a key factor in a successful audit. Inevitably, the audit team will have requests that need to be filled, analytical questions that need thoughtful answers, and a variety of other matters that will need to be addressed. While it may seem burdensome to be available and seemingly interfere with other responsibilities, the more timely and accurately the audit team’s questions are answered, the quicker the audit will be completed. When audit requests are left unfilled and questions not answered, the process can drag on. The audit team will also strive to be available to you to answer any questions or provide advice throughout the process.
As mentioned above, the audit team is dedicated to providing you with the support needed and be a valuable resource. Ask your audit team questions before, during, and after the audit process. We are committed to providing the best service possible, so take advantage of our vast knowledge and use us as a resource. Simple questions about your organization’s pain points could ease your workload, lead to meaningful solutions, or discover other ways for our firm to help your organization.
Stay Current on Accounting Pronouncements
Recently, many new accounting pronouncements have been issued that affect nonprofit entities. It is crucial to understand these pronouncements, the impact they may have on your organization, and their timing. Developing a timeline and strategy for implementation will keep you ahead of the game and prepare you for the upcoming audit. Additionally, working with your auditors to understand the impact any new pronouncements may have on your organization’s financial statements will allow you to make better informed decisions.
If you need further guidance or have any questions on this topic, we’re here to help. Please do not hesitate to reach out to our trusted advisers.