How to Prepare for an Audit?

Audits not only verify the credibility of your financial statements but also give your shareholders newfound confidence that the information provided to them is accurate. However, audits are one of the most time and resource-intensive processes if you’re not well prepared.

Here are a few tips to help your business ensure a smooth audit period:

Plan ahead of time

An audit requires a lot of homework, both from the company as well as the auditing agency. Not only do you need to be available during the audit fieldwork but also ensure communication with those who are involved in the process. Think of an audit as a year-long process and not something that happens toward the end of the year. Set reasonable expectations for yourself and the team. Keep your reconciliations scheduled throughout the year.

We also recommend appointing someone from the company’s finance department to be the point of contact for the auditors. Make sure there is an open line of communication between the auditors and your organization throughout the year. Auditors don’t like surprises. This will keep them in the loop throughout the accounting period. All the information must be available to the independent auditors timely.

a snapshot of an audit process carried out by Faber LLP.

Keep your data organized.

It always helps to have an audit schedule in front of you throughout the year, so you can keep your financial information organized and well-sorted. We recommend creating subfolders for different transaction cycles or data categories. Designating separate folders for cash, investments, payables, receivables, fixed assets, and debt will make things easier for you. This also makes it easier for you to retrieve any critical schedule as and when needed. Simultaneously, schedules pertaining to sensitive information like payroll need to be maintained in a password-protection or restricted network location.

Seek assurance services from professionals

Professional accounting experts offer assurance services with an aim to reduce any chances of problems occurring during an audit. They’ll give you a concrete opinion on the fairness of your financial statements. An assurance service also includes lawyer trust audits and broker trust audits.

If you’re based in Edmonton, Faber LLP will give you the assurance that your financial statements are in accordance with the accepted financial statements and that they’re providing a reasonable representation of your company’s financial health.

The experts at Faber LLP will be glad to help you with their audit services. Get in touch!