Are You Prepared For Your Next Financial Audit?

 

Auditing financial statements can take anywhere from a few weeks to several months, depending on the size of your business and the complexity of your financial records. 

On average, small businesses can expect the process to take about three months. However, keeping financial records well-organized throughout the year can greatly expedite the audit process.

Audit readiness should be part of your regular operations as the bulk of your audit prep happens during normal daily transaction processing. 

 

What does this look like?

  • Organise Documents: Save and organise invoices, bills and documents digitally for easy search and reference.
  • Create an Accounting Schedule: Develop and regularly update your accounting schedule for transparency and ease of understanding.
  • Robust Accounting Policies: Establish clear accounting policies and follow them meticulously.

 

Review previous audits

Analysing past audits can provide valuable insights and highlight areas that need improvement. What went well, and what could've been better? Identify recurring issues and find ways to combat areas of concern. 

  • Examine previous audit reports: Identify recurring issues and areas of concern.
  • Implement recommendations: Ensure that any recommendations from previous audits have been addressed.
  • Learn from past mistakes: Use past audits as a learning tool to avoid repeating errors.

 

Conduct a pre-audit review

A pre-audit review is essential to help identify potential issues before the official audit begins. This proactive approach allows you to address problems early and increases your chance of passing your audit first time.

 

  • Perform an internal audit: Conduct a thorough internal audit to assess readiness.
  • Identify discrepancies: Look for discrepancies or irregularities in financial records.
  • Resolve issues: Address and resolve any identified issues before the official audit.

 

Engage with your auditors

A good line of communication with your auditors can alleviate the stress of an audit and contribute to its success. 

Regular updates ensure that queries, questions, and requests are promptly addressed, preventing delays. We suggest scheduling weekly calls for run-up and during the audit process, using an audit project plan and tracker to monitor overall progress. 

Additionally, a pre-planning meeting before the audit actually begins is recommended to identify potential issues, such as significant changes in accounting or auditing standards, that may impact the audit differently compared to previous years.

 

Form a specialised audit task force

Having your own internal audit team to support you is an absolute game changer when it comes to audit readiness. 

An internal audit team can significantly boost the efficiency of your external audit in a number of ways:

  • Year-Round Monitoring: An internal audit team is available year-round. By adopting a continuous audit approach, internal teams can identify and resolve issues before external auditors arrive, reducing control exceptions.
  • Effective Control Monitoring: Regular reviews by a trained internal team ensure controls operate effectively, leading to a smoother external audit. This proactive approach strengthens the overall control environment, providing constant reassurance.
  • Deep Control Understanding: Internal auditors, through continuous auditing, become well-versed in the organisation's controls. This knowledge is invaluable during external assessments as it can provide insights and facilitate communication with control owners.
  • High-level Organisation: Internal auditors can streamline the audit process by organising meetings with relevant personnel and managing evidence requests. Their familiarity with team members' workloads helps minimise disruptions.

For optimal results, consider engaging an interim audit team to enhance these benefits further.

 

Take advantage of our Blended Model®

At Oakwood Resources, we advocate for our Blended Model® approach, combining the expertise of interim management with strategic consultancy to ensure thorough audit preparation.

 

  • Leverage interim expertise: Engage interim managers with specific audit preparation experience.
  • Incorporate strategic advice: Implement strategic insights to enhance audit readiness.
  • Optimise resources: Ensure efficient allocation of resources for audit preparation.

 

For more guidance on audit preparation and interim management solutions, speak to our team of experts. 

 

info@oakwoodresources.co.uk

0203 0069603 | 01908 030200