keep your financial statement audit off the naughty list.
by sarah timmons
sarah timmons is a chief auditor with auditclub.cpa, which provides on-demand audit and assurance review support for work papers, financial statements and engagement quality control reviews, as well as quality control and training services, and more to audit departments of cpa firms of all sizes.
as december flies by and busy season quickly approaches, it’s time to reflect on the successes and shortcomings of the past to plan for the first quarter of the new year.
more: six benefits of an internal audit | the ten financial controls that’ll make you a hero | five cash reports you can’t live without | when an audit is a great thing
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effective and efficient audits are the result of proper planning and, most of all, communications – with your staff, your client and, sometimes, your therapist.
here is a checklist of some simple tasks to help make the audit season a bit less stressful:
- check on your confirmations. were they all sent out on time? follow up on those not received before the agreed-upon deadlines. make inquiries, and review interim or preliminary trial balances in advance to check for anomalies. are there any new balances to consider confirming? are those paper confirmations on the naughty list? consider helpful technology tools such as confirmation.com and audit sight to help streamline the process and aggregate requests in one place for ease of use and review.
- check that client request list. digital collaboration with your clients is table stakes these days. whether digital or not, review that list twice against actual requests from the prior year. is it all-encompassing? are there duplicate or unnecessary items that can be removed? firms waste thousands of hours of “bench time” waiting for client documents. getting ahead of that curve is one way to minimize wasted time and increase profitability.
- time for a standards check: accounting for leases is officially here. what have you done to prepare? think about your clients individually. what is their approach to implementation? find potential risks based on what you already know and develop a tailored preliminary audit approach. according to the aicpa, there are at least 15 new standards about to go into effect for the 2022 or the 2023 reporting year, and now would be an excellent time to make a list and check it twice to ensure that your audit team and your clients can stay ahead of the curve.
- check on your clients: are they having any hangups in their closing process? what can your firm do to help avoid any delays that might lead to a winter snowball? connect with your clients to discuss the benefits of moving work forward with interim testing. start scheduling regular check-ins now. they may take additional time, but in my experience, they can streamline the process, improve communications and often result in a better relationship between your team and your client.
- engagement team check: talk to your engagement team members. so often audit teams get stuck repeating the same inefficiencies. commit to developing a new, more efficient approach. consider audit data analytics. set a plan in motion before the brutal cold of busy season arrives.
the audit process can be both rewarding and frustrating at the same time. using this simple checklist can alleviate at least some of that stress and improve the quality of your work, the productivity of your people, and your own sanity.