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Your audit, from good to great

We want our clients to get more out of their audits! We are not talking about heartburn either. We invite you to look behind the audit curtain. Maybe this will shed some light on what is going on. We have an action plan, some things you can do to help turn your audit from good to great. We hope this prompts our clients to reach out to us with ways we can help do our part!

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First, let us talk about how auditing works. Standards require us to plan our audits using an analytical analysis and inquiries of your management in order to build expectations. We are required to document examples of certain key controls. We use this information to assess risks related to the fair presentation of the financial statements. The risk assessment process is a highly tuned methodology involving the audit partner and all members of the audit team where we define our audit approach. Our approach includes making assumptions, testing those assumptions and drawing conclusions based on the results of those procedures. Having a great audit hinges on planning.

Action Plan

Here are some things you can do. We know our clients are busy juggling operational needs and audit requests. When discussing the year’s operations with your auditors, really use that time to flesh out all significant activities and changes. It makes the audit flow smoother when we can anticipate changes up front. If we discover changes mid-stream, our audit plan changes. Here is when your staff start asking questions like “Why are they asking for these reports? Why are they confirming this activity when they didn’t in the past?” Our questions are not meant to call into question anyone’s integrity or honesty. It might seem like we are when we ask how your staff ensures accuracy or if they monitor certain activities. That is because we are performing steps meant for the planning stages where we are required to understand and document examples of your internal controls. A great audit experience starts with performing your own planning meeting with your staff to flesh out your processes, expectations and operational changes internally. When our audit team reaches out, you can fill us in. This extra time pays dividends to a great audit. Some qualitative and quantitative measures you can discuss with your staff are:

Quantitative

Rate changes

 

Increased pricing

 

New grants

 

Employee turnover

 

New or completed capital projects

 

Debt issued or paid off

 

New health insurance plans

 

Discontinued/complete grants

 

New department revenue streams New ventures COLA’s New accounting pronouncements

 

Qualitative

New software

 

New or revised contracts or agreements Change in vendors or payment methods Process improvements in reconciling between systems, reports or departments
Implementing systems in the coming year New board members or change in strategic direction Risks you may have identified and their resolve Changes in internal processes due to turnover or hiring

Some changes might seem insignificant to our clients. However, they might just cross our audit trip-wire triggering additional requests. We know it can be challenging to keep a running tally of these items. After all, many of these changes are discovered when our audit team meets with various staff from different departments. Even if something is not materially significant to the audit, having the knowledge of it might allow us to discuss best business practices for strengthening controls or mitigating your exposure to risks like inaccurate data or fraud.

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Crossing Our T’s

Once we have identified changes, we might make additional requests. Make sure your staff knows to communicate with the key audit contact, you (Controller, Finance Director, etc.) during fieldwork about these requests, especially if they require time and resources to produce. If you are aware of the requests you can anticipate the additional resources needed or if an alternative direction is best. We want to do our part. We request these items through our online portal for awareness during fieldwork.  Henry + Horne also holds exit interviews for our clients so we can pass along to you items that remain outstanding at the end of fieldwork.

You can have significant changes and/or turnover and still take your audit from good to great, but you cannot do it alone. It is going to take effort on both sides.

Partnership

We staff your audit with the appropriate level of seniority to both anticipate your needs and provide an effective and efficient audit. This is our commitment to you. Every year we discuss making your individual audit more efficient and we invite you to be part of that. A partnership is only as good as its communication. As you begin looking forward to your audit, please reach out to us. You have your own story and recommendations for how we can help offer you more. Let’s take your audit from good to great!

As always, feel free to contact us with any questions. For more on how Henry+Horne can help you with your business’ audits, feel free to view our Audit Services page.

Nick Baldelli, CPA