Preparing for the Audit - Continued

Auditors normally provide a list of items that they will need during the course of the audit. This list is usually prepared and delivered to the client during the planning phase of the engagement. These items normally include reconciliations and support for selected transaction throughout the year. Management should take time to prepare these work papers and have all applicable requests completed before the audit begins. This maximizes the auditor’s efficiency and management’s time required during the fieldwork.

Another great idea for management to perform is a review of the balance sheet accounts starting at the current assets and moving down through net assets (equity). This review includes a general ledger detail and reconciliation with relevant third party information. This helps identify differences and or errors that have been recorded during the year. Based on the new auditing standards, specifically SAS 112, any error above a significant amount is reported as a significant deficiency by the auditors. To eliminate unnecessary comments in the auditor’s report, management should consider making sure reconciliations and supporting documentation is completed before the audit.

Do you have questions about the audit? E-mail or call me.