On February 2nd 2015, my 6th eBook: Accounts department - Advice for business owners and finance managers will be published for ipad, iphone and kindle and will be available from amazon.com. This blog entry is a sample from the eBook. There are 20 topics like this one covered in the eBook.
One of the busiest times of the year is the year end and the annual audit. Good preparation for the auditors makes a big difference to the time they take and the amount of disruption suffered by the finance team and management. As audit fees depend on the time spent, anything you can do to help the auditors be more effective should reduce the fee they charge. Here are five things you can do:
1. Agree a realistic and detailed audit timetable that you and the auditors can commit to. Ensure that key members of staff are not absent on leave during the audit.
2. Ensure that the timetable allows sufficient time for you to have finalised the trial balance and draft accounts before the auditors arrive. It can be very expensive for them to audit a “moving target”.
3. Compile an audit file for the auditors containing copies of all relevant documents and information. The auditors should supply you with a schedule of the information they require.
4. Arrange for a member of senior management to spend some time meeting with the auditors and showing them around the office, shop or factory. This will give the auditor a wider perspective of the business.
5. Once the audit closing meeting has finished and the accounts are finalised, don’t delay in having the financial statements signed by a director and the auditors. If you delay, the auditors will have to make further checks before they are prepared to sign the accounts.
Frequent and open communication with the auditors can make all the difference to their efficiency.
You should be meeting the auditors before they finalise their audit planning process. At the meeting advising them of important events or issues encountered during the year will help them to plan their audit.
Arrange to meet the auditors periodically during the course of their fieldwork. Use the meeting to update each other on progress and issues arising so that surprises are not stored up until the end of the audit.
Your staff should make themselves available to answer audit queries they should pay particular attention to ensuring junior auditors understand the responses provided to them.
The post fieldwork audit review will generate further queries. If you delay in responding to these the audit team will have moved on and the cost of their dealing with your response may increase if more senior staff have to be utilised.
Use the closing meeting to explore ways to jointly improve the efficiency of next year’s audit process.
As a first step, why not pick the phone up and call John or email him and arrange to meet up.
John's website is: http://www.nomizon.co.uk
His credentials: http://www.linkedin.com/in/johntoppin