December 2018 Boerne Business Monthly Article written by Anette Barrera, CPA, Audit Manager at Akin, Doherty, Klein & Feuge, P.C.
“Twas the night before the audit, when all through Accounting, the staff was working hard as the audit preparation was daunting. The statements were almost ready and prepared with great care, in hopes that the auditors soon would be there.
The start of 2019 is right around the corner, which means it’s time for businesses and accountants to prepare for their year-end close and perhaps a financial statement audit. If you’re wondering if your organization needs to undergo an audit, it all depends on the requirements of your internal and/or external stakeholders. Unless your industry requires one (i.e., larger financial institutions, publicly-traded companies, non-profit organizations with over $750,000 expended in federal funds), financial audits are not mandatory. However, there are situations where you may need one. If you’re applying for financing through a creditor or investor, these parties may require the additional assurance that an audit provides. Likewise, many not-for-profit organizations require an audit to successfully fundraise.
As noted, not all companies require financial audits. But those that do are left with the overwhelming task of planning and preparing for the requests of the external auditors. It is essential that the audit process be smooth and efficient to ensure timely completion of your goals and deliverables within the expected time frame. Below is a list of five tips to help you in preparing for your year-end audit:
1) Planning and Coordinating Your Audit Dates
Set a reasonable expectation for your year-end close. Knowing the audit start dates well ahead of time allows both your accounting team, and your audit firm’s team, to have a clear and realistic expectation of the audit process so the completion date is met. Coordinate available dates and communicate any potential problems with your auditor to ensure that both teams are prepared for the audit process and its deadlines. It is imperative that your key accounting staff be available while the auditor is carrying out fieldwork. This includes flexibility and availability of staff to assist in answering questions and providing additional supporting documentation requested by the auditor.
2) Perform Timely Reconciliations
It is crucial that account reconciliations be performed throughout the year. Account reconciliations should be completed on a monthly basis to ensure that errors are identified and investigated in a timely manner. If you wait until the year-end close process, you may not have enough time to resolve any reconciling issues prior to the audit, which may make it more time consuming for both the accounting and audit team and delay the completion of the audit.”
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Anette Barrera, CPA is an Audit Manager at Akin, Doherty, Klein & Feuge, P.C. (ADKF). ADKF is a full-service accounting firm with offices in San Antonio, Boerne and New Braunfels. Anette graduated from the University of Texas Pan-American and has over six years of public accounting experience. Anette specializes in audits and reviews for industries including not-for-profit organizations, publicly-traded companies, manufacturing, construction, and services industries, as well as employee benefit plans. Anette spends most of her free time with her husband and her English Bulldog.