- Assistance list - Most auditors provide their clients with an assistance list or a “Prepared by Client” (PBC) list. Take advantage
of this tool to set yourself up for a smooth audit. The assistance list is a working document and should be updated as you go. If something doesn’t
apply, remove it from the list. If the auditors request something each year and it is not on the list, add it to the list. Once the auditors are
on-site, it is difficult to juggle daily work, audit requests, and audit preparation. Using this list will help you stay organized for a headache-free
- Internal control documentation - Auditors are required to gain an understanding of internal controls related to the key transaction
cycles. They typically rely on internal control narratives and questionnaires. We all know that these take time to update; however, they can be
updated during the year. You do not need to wait until audit fieldwork to update these. If you implemented new
payroll software during the year, update the payroll internal control documents at that time. Don’t put added work on your plate during an already
busy audit preparation time by waiting until fieldwork.
- Debt schedules - This schedule can be updated for the auditors as soon as you make the last debt payment during the fiscal year. If
your fiscal year-end is June and you make the last debt payment of the fiscal year in May, you can complete the debt work papers in May. This is
another item to check off that assistance list well before field work preparation.
- Communicate with your auditors - Communicate with your auditors throughout the year. It is much more efficient to discuss an issue
when it happens and determine the proper way to handle it. While it is fresh in your mind, reach out to the auditors for advice so you can get
it right the first time. This could help avoid an adjusting journal entry and potential findings. Also, if there are any issues with the audit
process or timing, communicate that with the auditors too. This will give the auditors guidance on what improvements need to be made in the subsequent
year. No one is perfect and there is always room for improvement.
- Balance sheet accounts - The auditors will request external evidence to support significant balance sheet accounts. This is something
that can be done before the auditors arrive on-site. Providing the external support on a portal or shared drive will reduce the number of questions
and audit requests that occur during the audit. It may even reduce the amount of time the auditors need to be on-site if they can get a jump-start
on some of the audit procedures in their office.
The audit process involves teamwork from both the organization and the auditor. Good communication should be flowing both ways before, during, and after
fieldwork. The common goal is the timely issuance of the audited financial statements. Being prepared for your audit will not only provide a better
balance between day-to-day duties and the audit process for key employees, but it will also give the auditors more time to offer suggestions for efficiency
and process improvements.