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Audit: How to Avoid the Splitting Headache

10 October 2023

by Fiona O’Loughlin, Director and Principal

While nobody looks forward to their annual auditor visit, preparing in advance can minimise disruptions to your business and help make things a little easier. In fact, with the right approach and attitude it can be a useful tool for your business. In this blog, our Director, Fiona O’Loughlin, offers advice on how to make the audit process more successful.

An Overview of the Process

In the first instance, you should meet with your auditors to discuss their requirements. Ask how you should present the information and which records you need to provide access to. A reliable auditor will provide you with a detailed list of documents and information needed. Set a date for the finalisation meeting and get it in writing. It is also a good idea to ask how long they will remain on site. Your company’s size and the amount of preparation you’ve done will determine how long the audit will take.

Review your financial statements

A review of your financial statements prior to the audit would be beneficial. Consider each of the following:

  • Reconcile all balance sheet accounts.
  • Keep up with changes in accounting standards – your accounts should reflect these changes.
  • Remove any scrapped items from the fixed asset register.
  • Check the validity of your current policy against slow-moving stock. Have conditions in the market changed since you established your policy? Has your methodology outlived its usefulness?
  • Address all problematic or doubtful debts within the sales ledger.
  • To save the auditors time, request confirmation letters as soon as possible.
  • Perform year-end close-down procedures. Changing numbers will make the audit process inefficient.
  • Review and approve all journal adjustments.

To get the most out of your audit, come prepared

Consult with your employees and get them on board. Be open to suggestions they might have for improvements. Take note of any gaps in your internal procedures that could be addressed before the audit.

It’s always a good idea to have more staff on hand than you think you might need. It’s also worth asking how many auditors will be present and making sure that you have adequate space for them. Unless this is your first audit, learn from previous errors. Review proposed adjustments or recommendations that arose during the year prior and ensure that these are not repeated.

The best way to handle an audit is to see it as a chance to improve on your internal processes. Auditors are trained professionals. We are here to help you identify shortcomings in your company’s financial controls. So make sure you ask questions about the things that bother you. The end result is a better understanding of how your business works and an opportunity for improvement.

You should now be better prepared to handle a company audit. If you would like to know more about working with DTE, get in touch today.

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