How To Best Prepare For Financial Audits

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Not all auditing processes are tax related. If you own a business that has taken out loans or have received lines of credit, you are quite likely familiar with financial audits. These are typically performed by a certified public accountant or accounting agency, and there is much that you can do to minimize any problems associated with the process.

Your first goal is to get everyone on board. Because the word audit can have such a negative connotation it is often likely that the reception of the auditor can be less than ideal. Before the process begins it is important to call a meeting and explain to all those that are involved the significance of the process. This will also give all staff members a chance to find roles that they can assume in order to assist with the preparation.

When your files are disorganized this creates a hectic work environment for the accountant and for all other staff members. The work day can be continually interrupted by frequent requests for documents and frantic searches for them. You should immediately organize a team to bring the record keeping process up to date, to create a clear and comprehensive filing system.

Run an office check. This means that all offices, especially those with typically closed doors should be opened to the organizational team. It is often the case that necessary documents and records are not in the filing system because they are either on or in the desk of an employee. While preparing for an audit it is imperative that all employees, including upper management, relinquish unfiled documents in order that the accountant might have easy access to them.

You should provide a comfortable, clean place for the auditor to work during the process. Current company files and all other company records should be made accessible and the updated filing system clearly explained. It is imperative that both physical and electronic records have a clear organizational strategy and that the person or persons in charge of the audit are able to easily locate any information that they need. If access to electronic files will be necessary throughout the audit, this too should be accommodated in a fashion that is both efficient and understandable to someone who is an outsider to the office computing system.

About the Author:
O'Neal and Associates, P.C. (http://www.onealcpas.com/) specialize in financial audits for small to medium-sized non-profit organizations and in preparing Forms 990-Returns of Organizations Exempt from Income Tax.



Article Originally Published On: http://www.articlesnatch.com


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