'The role of an auditor
is to evaluate several aspects of the business, or of ongoing projects and even employees,' explains an article on nacpaf.com
. To do this, your auditor
will look at whether you reported all your business income, your business's expenses, whether your payroll met your tax obligations, and much more.
It's a labour-intensive process that requires a keen eye for detail while delving through tons of paperwork.
And that's why all it takes to cut the time they take to do your company's audit
in half, is to make sure you have all your accounting records
on hand for your auditor
the minute he walks through the door.
Here's how to prepare for your company's next audit
correctly to ensure it runs smoothly and quickly – and saves your company money in the process.
Make sure you have these five things in place to ensure your company's audit runs smoothly…
#1: Make sure you have your company's trial balance at year-end (including opening balances) on hand in an electronic format. Your accounting package should generate this for you. Remember to disclose your commitments and any possible contingencies in your financial statements where appropriate. Your auditors will need this to check the accuracy and completeness of these disclosures.
#2: Keep a file with copies of the minutes of management and directors' meetings for the year under audit
review on hand.
#3: Supply your auditors
with an electronic copy of your company's detailed general ledger for the year under review.
#4: Keep a list of legal disputes, including details and amounts involved in a special file for your auditors
. In it, make sure you include a list of attorneys you currently use and their contact details.
#5: Supply any details of significant events that occurred in the year under review. For example, your auditor
will need to know if your company lost a major contract or if one of your warehouses burnt down with R1 million worth of stock.
So there you have it! Five easy steps you can take to cut the amount of time your auditors
waste searching and slash your audit
bill in half.
For a detailed explanation on audits
and how to prepare for it, get your hands on our FSP Business Practical Accountancy Loose Leaf.
In the Practical Accountancy Loose Leaf
we've got a dedicated chapter on audit preparation
, in this chapter you'll discover...
Checklist: How to prepare for an audit A 05/003
Sample schedules included in this section:
Directors remuneration schedule
Debtors age analysis
Bad debts schedule
Debtors credit balances
Long outstanding debtors
Fixed asset register
Lease commitments schedule
Leave pay accruals
Revenue and COS graph
Repairs and maintenance
Legal fees schedule
Interest received schedule
Loan account certificate
Get your copy of the Practical Accountancy Loose Leaf