How to prepare for an annual audit
If you are gearing up for an audit or looking for guidance for the future, fear not!
Although it may be spooky season, you shouldn't be scared or intimidated about an upcoming audit.
Our Audit Manager, Mhairi Stewart, provides you with seven tips to follow for a smooth-sailing audit process:
1. Know what your auditors role is - During audits, auditors examine the accounting records, not execute them; we're looking to certify the accuracy of the records and books, so they should be clean and accurate.
2. Regular monthly reconciliation - Don't wait until year-end to reconcile your accounts. Regular monthly reconciliation ensures that your financial records remain accurate and up-to-date throughout the year.
3. Have detailed documentation of journal entries - Make sure to document all journal entries with precision and detail. Providing comprehensive explanations will help auditors understand the rationale behind each entry, leading to a more efficient audit.
4. Early addressing of complex transactions - If your business deals with complicated accounting transactions, it's essential to address them early in the audit process. Discuss these transactions with your auditors to ensure they fully comprehend the nuances.
5. Request a prepared by client document (PBC) - Before the audit begins, request a "prepared by client" (PBC) document from your auditors. This document outlines the specific information and documents the auditors require for the audit.
6. Plan the audit timing in advance - Work with your auditors to schedule the audit well in advance and stick to the agreed-upon timelines.
7. Prepare for communications - While audits may not be anyone's favourite time of year, responding to audit-related emails promptly means the quicker we go away.
Looking for a hassle-free audit experience? Reach out to us today to learn more.