tax audit

Five Ways to Improve Audit Efficiency

In today’s business landscape, we’ve all come across tales of financial audits gone awry, leading to unnecessary stress and time consumption within departments. However, the silver lining is that with strategic teamwork and a proactive approach, your organization can not only survive but thrive during audit situations. By fostering a collaborative relationship between company leaders and auditors, you can alleviate stress and ensure a more efficient audit process. Here are five strategies to help you navigate through a successful audit with minimal stress and anxiety.

1. Maintain Consistent Communication

Even though the roles of CFOs and controllers can be daunting, staying connected and communicating with auditors can significantly simplify the audit process. Incorporate them into key transactions to keep them informed. While auditors may have restrictions on their involvement in these transactions, they can still provide insights into potential issues and guide you towards the right course of action. Early involvement can prevent significant delays by resolving complex issues before the audit truly begins.

2. Initiate a Kickoff Meeting

Once major issues are addressed and auditors are briefed about your company, transition to the logistics of the audit. Ensure that all team members understand the audit’s time frame and expectations. Typically, auditors will provide a list of required items before commencing the audit. Collaborate with a team member to review the list, discuss it with your auditors, and prioritize tasks. This early kickoff meeting sets the tone for the audit plan and strategy, ensuring everyone is on the same page. With auditors engaged, more information is shared, and there’s an increased likelihood of agreeing on the audit plan.

3. Monitor Progress Regularly

Regular meetings with your auditors can significantly enhance the efficiency of your audit. By holding weekly meetings to discuss the project’s status, you can gauge the pace of the audit and ensure that your plan is being executed effectively. You can also request auditors to provide status updates on all aspects of the audit, discuss their findings, and address potential issues promptly.

4. Secure Personnel with Public Accounting Experience

If feasible for your company, consider hiring at least one team member with public accounting experience. Given the intricate and time-consuming nature of audits, having a professional who understands the auditors’ perspective can expedite the process. This individual can also help with communication, making it easier to estimate schedules and expectations accurately. Moreover, they can liaise with auditors, understanding their needs to expedite the audit process.

5. Engage an Audit Advisory or Prep Firm

Engaging with experienced professionals from an audit prep or advisory firm can be a wise decision in any industry. With businesses, especially new ones, often lacking the resources or time to ensure a smooth and quick audit process, hiring an outside company or professional to prepare them for audit requests is a viable option. Hiring an outside firm to assist with the audit process can eliminate the need to hire a permanent employee. Audit advisory firms can help prepare the financial statements needed for the audit, draft technical memos, and address issues such as prohibiting two task auditors from working for public businesses. Professional advice not only provides valuable insights but also reduces the time and cost of your audit.

By fostering open communication with your auditing team, you can mitigate issues and minimize the impact of any arising problems. Remember, most delays and issues stem from a lack of communication.