Tips for preventing year-end audit stress
For those tasked with audit preparation, the month of December can bring about more than highly choreographed visions of sugarplums. Scrambling at year’s end to prepare for the audit—trying to recall activities from months past, sifting through pages of notes—can bring about a great deal of added stress.
But here’s the kicker: It doesn’t have to be this way. Here are a few tips for how to prevent year-end audit stress:
1. Work your audit preparation into monthly reconciliations
This extra step may take another hour or so of your time, but it could save you hours of additional work at year’s end. Plus, you can ensure items are coded correctly and adjusted throughout the year, which means you’ll be able to regularly provide your board or council with accurate information. It’s a great way to avoid hearing questions such as “Why are these numbers so different from what we saw earlier this year?” Just be sure to prepare audit workpapers that can easily be tied to your general ledger.
2. Update your audit workpaper throughout the year
At the beginning of each year, review your audit workpapers and determine which items can be updated throughout the year. There may be some items that can’t be addressed until year’s end; however, be certain to work the items that can be updated into your monthly reconciliation process. It’s also a good idea to discuss questions with your auditor as they arise—don’t wait until the last minute.
3. Set deadlines for each audit workpaper
As our Managing Partner Steve McDonald mentioned in an earlier post this year, deadlines are a good thing. Once you have the necessary information for completing a workpaper, set a deadline for finalizing it. Then stick to the deadline—no matter what.
4. Consider changing your process
Take a step back from your audit preparation process and ask yourself, “What could I change to make it better?” This simple exercise could uncover a new step to enhance the process, or an alternative to your current schedule. There’s always room for improvement.
Preparing for your organization’s audit throughout the year can lead you toward less stress and, best of all, more holiday cheer. And, by taking steps to prepare for your audit each month, you can address issues while they’re fresh in your mind.
We regularly hear this from clients who are preparing for their audit: “I should have kept better notes!” Don’t let this be you. Make a New Year’s resolution to make your audit a formality rather than a stressful binge of last-minute preparations.
Andy Berg, CPA, is AEM’s Government Segment Leader. When he’s not fishing for ways to help governments boost efficiency, he’s casting lines for whopper muskies. You can reach Andy at 952.715.3003 or at firstname.lastname@example.org.