You have an audit coming up and you are apprehensive about how much will be asked of you and what type of information that the auditor will be looking for. There are several steps that can be taken before the auditor arrives to help make the audit go smoothly.

What to expect
Changes in regulation, lending, or management may have led to your business needing an audit. This is the first time you have had independent auditors come to your work and look over your books, or you may have been through many audits and just need a refresher on what the auditors will need.

Preparing for your audit
Plan for this time like you would if you were going on vacation or planning to be out of the office.

  • Get a plan in place where the normal business operations are taken care of by someone else, or completed before the auditor arrives. That way, you can be available to answer questions and provide support to the auditor.
  • Prepare backup of all balance sheet accounts with notes to help the auditor reconcile the accounts to your financial statements. Feel free to forward these items along to your auditor as you complete them. The auditor might have time before they come to your office to be getting started.
  • Make copies of all company policies and procedures for the auditor. These documents are not usually associated with financial statements, but they allow the auditor to gain insight into how your business operates. The policies and procedures also allow the auditor to note things your entity does well, and provide guidance on things that could be done better.

Below are two links from Dunbar, Cook, & Shepard, P.C. and other online sources with more details into what an audit entails:
http://www.dcs-cpa.com/resources/planning-for-your-annual-audit.html
http://news.cpamerica.org/dunbar/auditamerica/article.asp?a=129

If you have any questions about preparing for an audit, please contact us 417-881-0145.

written by Eric Lampe, Senior Accountant