Helpful tips for an easy audit
It’s that time of year; audit season is fast approaching and for many not for profit accounting staff it can be an ominous time. But we have a few helpful tips that we think can alleviate some of the stress. It’s all about being prepared and well-organised in the lead-up to your audit date. Kirsten Forrester, Accounting For Good’s CEO, says,
“The audit looks at the 12 months of the financial year, but we don’t think there’s a need to wait until your financial year has closed to start preparing. We think now is a great time to start making sure you’ve got everything in place. Don’t wait until the week before the auditors arrive to start your reconciliations.”
It is common practice for auditors to send you an audit requirements checklist. It might seem like a simple suggestion, but make sure you read that thoroughly. It’s important that you understand what they want from you. It should be relatively consistent year on year, but if you have engaged the services of a new auditor you might find it a bit more challenging. Kirsten explains,
“If you’ve got a new auditor, they’ll have a different way of going about things and they will probably want to dig a bit deeper as they get to know your organisation, as well.
Ask for your audit requirements checklist early, you can start gathering that information as soon as possible. In June, for example, you’ve already got 11 months’ worth of financial data… your records… your bank statements… all of that information.”
To make things easier we recommend creating a shared online platform to share the documents. Rather than having to print out folders of information, you can simply load documents to the system… they will appreciate that, we assure you! Some auditors will have their own system in place already, so liaise with them on the best way to collaborate on your audit documents.
By starting the sharing process now, it makes the next step relatively painless. Kirsten continues,
“Once you close off June, in July you’ve just got one month’s worth of things to capture, so you might just capture whatever fixed assets that you’ve purchased in June and that needs to go into the file. Or the final bank statements for that last month… there’s really no need to start from scratch at two-days-to-audit.”
You can be guaranteed that an auditor will want to review your contracts, especially for your funding but also for leases and other commitments. So, we recommend having them easily accessible and ready to share.
Electronic sharing of documentation is so common that you should not have to wait for a hard copy to arrive in the mail. Your auditor will not expect to see a paper version. Kirsten reiterates the need for shared access,
“Setting up a good online sharing solution with the auditor will be really appreciated by them and by you as well when you don’t have to slave over the photocopier.”
To help you be ready, check your records today and request copies of any missing contracts to be emailed as soon as possible.
Upload supporting documents
One of the major benefits of online accounting software is that you can attach the supporting documentation for transactions directly into the system. This feature makes it a great source of information. If one of your managers is trying to understand where the organisation has spent funds, they can access the data and easily see the information. Same too for the auditors when they are reviewing your records. Kirsten says,
“Gone are the days when the auditor would come out and sit in your board room for a couple of weeks, going through the paperwork and stacks of lever-arch files. You can give them access to your accounting software and they can jump in themselves and have a look.
We find now that auditors don’t have to do much of an onsite sampling exercise… they’ll help themselves to your accounting records and that’s why it’s important to upload the supporting documents.
They can then see the evidence for the transactions you’ve posted, without having to come to you and say, ‘Can you dig out that invoice from last September?’”
By implementing these tips now, we are sure that your audit will run smoothly and be far less disruptive than you envisage. If you have any questions about how Accounting For Good can help you prepare, contact our team today.