There are some simple steps any entity can take to help make a financial audit as simple and painless as possible. First, good cooperation between the client and auditor is essential. Second is the client’s maintenance of a good system of internal controls over the financial activities occurring in the entity. These things make it easier for the auditor to understand how certain processes impact financial reporting as well as to identify areas for improvement. Next is the assembly of items requested by the auditors. Having all the documents prepared and ready just makes the audit team that much more efficient. The next step is very important. If your entity has been audited in the past, then take a few minutes reviewing the auditor’s recommendations that were made in the prior year and see if they have been completed in the current year. This can be a very helpful tool, especially if the recommendations were made on things that only occur once a year. Finally, it is also important to inform all interested parties within the organization that the financial auditors are coming and give them an idea of what to expect.
On the flip side, the audit team should be receptive to any recommendations that you have based upon your prior experience with the annual audit for your entity or audits in general. Be sure to communicate your concerns with the audit team and the cooperation you expect that will make the audit process go smooth on your end.
These steps aren’t a comprehensive list by any means and may even seem minimal but it will really surprise you how much it will help both your team and the audit team.