It’s audit time … HELP!

CPAs Calculating the Latest in Audit + Accounting News

Is it that time again for the suits to show up at your front office asking for a conference room for two weeks and the lion’s share of your time to conduct your annual audit, while you’ve already spent hours compiling documents for their infamous “PBC List?”

Well as one of those pesky auditors, I’m here to calm your anxieties about your upcoming audit. First thing to understand is that we are not your foes. For whatever the reason, your company requires an audit, we are here to complete that audit in the most effective and efficient manner possible without interfering with your day-to-day operations. Our hope is that our audit is a collaborative effort from both parties to obtain the same goal: produce accurate and useful financial statements.

Here’s our process

Once we are engaged, by way of an engagement letter, we will have a discussion with you to go over key pre-planning issues such as results of operations, changes in management or corporate structure, changes in your industry and so on.

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After this, we will send a team out to your office to perform risk assessment procedures, which entail discussions with members of management and those having a role in the accounting, HR, sales and production processes. During this time, we will be walking through transactions in significant financial statement transaction cycles and performing other planning work. All of this is to drive the nature of our year-end audit procedures.

When year-end fieldwork is upon us, we will inhabit your offices for a week or two. This gives us undivided attention to your audit where we will perform audit procedures over the significant audit areas, make requests of documentation supporting transactions and make inquiries over any unique or complex transactions.

Once fieldwork is completed and we have obtained our sufficient appropriate audit evidence to render an opinion on your financial statements, we will have an exit conference with management to discuss any material weaknesses, significant deficiencies or other matters we identified during our audit. Upon the end of field work, or shortly thereafter, we will also present the draft of the financial statements (should you request us to assist in their preparation), proposed audit adjustments and a draft of the representation letter for your approval.

This is just a high level review of the overall audit process, however, it may still seem cumbersome and not worth the time and effort. As our client, your collaborative effort with us in making the audit move effectively and efficiently will be a win-win for both of us and allow you to get back to your normal day-to-day operations all the more quickly. Furthermore, if the product (audited financial statements) can help with your banking relationship or succession plans, it’s definitely a benefit to your organization as a whole.

Leslie Lee, CPA