In planning the annual audit there are some best practices to avoid problems during its preparation and execution. Implementing these practices will increase the value your organization receives from the audit process and help you comfortably meet your deadline for distributing audited financial statements to your investors. 

It is management's responsibility to prepare the financial statements and to design, implement and maintain internal controls relevant to the preparation and fair presentation of financial statements. The first step for management is to have an in-house accounting team capable of obtaining effective financial reports, which allows management to prepare financial statements that are presented fairly. While management may alternatively outsource the accounting function to a third party service provider, it is important to keep in mind responsibility for the financial statements lies with management.   

If you have not yet scheduled a planning meeting with your auditor, the time to provide an update on the year is now. Among the topics of interest to the auditor are changes to contracts, capital activities, fund performances, new investments and any other significant changes that occurred during the year. The expected field schedule of the audit and its completion should also be discussed at the planning meeting. Ask your auditors about new accounting pronouncements applicable to your company, which should be considered when preparing annual financial statements, such as updating accounting standards, for example.

It is also standard practice for auditors to provide their clients with a list of items required for the audit to be performed. Ask your auditor to provide this list before the end of the fiscal year, as knowing in advance what documents the auditors will need will help you get ahead of the year-end process. Carefully consider each of the schedules that you have agreed with the auditors, because if any of them consumes a lot of your or your team's time, question the reasons and check the possibility of obtaining the same information from another resource.

For ongoing audits, it is worth saving copies of the current year's documents for future reference. Ideally, note the source in your accounting system and the methods used to extract custom reports that were part of the year's request list. In the absence of significant changes to your business or operations, this will reduce your efforts in extracting these reports. This step is useful if you have had a turnover in your accounting department and a new employee has taken on responsibility for preparing and submitting information to your auditors.     

It is very important and recommended that before providing any document requested to the auditor, verify that the information is in accordance with the balance sheet and/or internally prepared financial statements. Even if the corrected information is consistent with the balance sheet, keep in mind that your auditor will want to know what has changed and the reasons for the mismatch. In this case, it is worth remembering that any reconciliations during the audit process increase the cost as they prolong the schedule. Early review can save time and help the team focus on more important issues.    

During the audit process, the auditors will ask additional questions and will likely need to talk to you or your team frequently. Designating one person to handle all audit-related requests and providing timely responses to all your questions will ensure an efficient audit. Then, a weekly or biweekly audit meeting between management and auditors is all it takes to discuss progress and resolve any issues identified.  

It is a standard procedure for auditors to request confirmations on account balances (from suppliers, customers, banks, lawyers and other relevant matters). When inaccurate balances or incorrect information is provided in the confirmation, someone needs to take the time to get the information corrected. To improve the accuracy of confirmations, it is best to prepare them as close to the confirmation date as possible. Investment accounts is also an area closely scrutinized by auditors. You may also consider including qualified professionals on your team who can contribute to the implementation of your assessment policies and procedures. 

Finally, encourage the use of technology and request access to all available tools that your auditor's company offers. Audit firms around the world invest significantly in technology and solutions that make work easier and more productive. Some of the common technology solutions offered by auditing firms to their clients include the use of secure file sharing rooms and the use of electronic signature technology services. Utilizing available technology solutions can significantly increase efficiency, help with compliance with applicable data protection rules, and add value to the audit process. 

TATICCA – ALLINIAL GLOBAL, always looking for new technological resources, to offer relevant content and facilitate the daily lives of its customers, has an exclusive area on its website for customers, aiming at exchanging data and information with work teams, thus eliminating problems with file uploads, among others.

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