Several folks feel a way of dread at business enterprise year-end. The preparations that must be done before starting an audit, are:
1. Plan ahead: Devote overtime each before and in reference to year-end on the point of being accessible throughout audit fortification, and to speak with those concerned within the audit method. keep schedules and reconciliations up-to-date throughout the year, you’ll scale back the time it takes to organize for the audit at the tip of the year.
2. Keep up-to-date on accounting standards: New accounting pronouncements might have an effect on your organization’s audit. you’ll need to remain up-to-date as a result of you’ll manage or track knowledge during a completely different manner (for example, by change documentation or reorganizing the chart of accounts) so as to implement new standards.
3. Assess changes in activities:
if the organization begins a brand new program or receives a brand new grant then area unit there any new reportage requirements. Such changes in activities might trigger accounting and reportage issues that ought to be communicated to the auditor throughout the design method.
4. Important lessons:
Take stock of any previous year audit changes, control recommendations, or struggles encountered throughout previous audits. There is a place to begin for self-review to ensure these problems aren’t perennial. throughout the design meeting with the auditors, discuss what went well throughout last year’s audit and wherever there could also be opportunities for improvement or more practical communication between the organization and also the auditors.
5. Develop a timeline and assign responsibility:
Review the list of work papers and schedules requested by the auditors, ensuring to get clarification of requested data once necessary. Assign every item from the list to an accountable person and embody a day of the month.
6. Organize knowledge: Create a repository of audit schedules that may be accessed in future years by the acceptable personnel. contemplate making subfolders for important dealing cycles or classes, like money, revenue, and assets, expenses and liabilities, investments, mounted assets, debt, etc. to create it easier to manage and retrieve schedules.
7. Raise queries: If the associate item requested by the auditor is unclear, arouse clarification before the beginning of fortification to avoid potential delays. Auditors area unit is typically happy to answer accounting queries concerning uncommon or rare transactions the organization might have help in accounting for.
8. Perform a self-review: Once all year-end closing entries area unit created, review schedules and work papers to confirm amounts agree or reconcile to the balance. Take a step back and assess the general monetary statements for reasonableness.
9. Be accessible throughout fortification: Avoid key personnel planning day without work throughout the audit, and contemplate rescheduling or suspending non-critical conferences for finance and accounting employees heavily involved in the audit.
10. Assess results: Maintain communication with the auditors throughout the time between fortification and also the supplying of the audit report. If there area unit any open things at the tip of fortification, establish specified dates for the knowledge to be provided to the auditors whenever potential.