A successful financial audit is one in which any errors are identified and corrected—and, ideally, it is also one where there were few errors to catch.
To help ensure that a company’s next audit is carried out smoothly and successfully, here are five key steps to follow:
Step 1: Prepare Preliminary Information
An audit is often all about the paperwork—making sure everything has been documented appropriately and in compliance with the law. Companies can simplify the audit process by assembling and organizing all the documents auditors are likely to need before the auditor arrives.
Step 2: Designate a Primary Point Person
One of the early steps in preparing for a successful audit is to choose a point person within the company to oversee the audit and work with the auditors. Ideally, this person should have the authority to answer questions and resolve issues the auditors raise. Having a primary point person will simplify communications and make the audit go more smoothly.
Step 3: Communicate Well — and Often
Good communication is key to a successful audit. Even with one primary point of contact there are often many people involved in assembling the necessary documentation. Internally, key personnel will need to communicate to adjust staffing needs and manage audit expectations. Externally, detailed communication can ensure the auditor correctly understands each situation brought to his attention.
Step 4: Review the Audit
Reviewing the first draft of the audit report is a crucial step in a successful audit. Look everything over carefully for errors, typos, transposed numbers, etc. and bring any mistakes to the attention of the auditor immediately.
Additional information about internal control procedures or clarification about ledger amounts may eliminate misunderstandings before the final report is filed.
Step 5: Create an Action Plan
Finally, the company should create an action plan for dealing with any issues arising from the audit. Take the opportunity to establish revised best practices and to prevent future issues.