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Five things you can do to cut your audit fees in half

by , 31 January 2013
Five things you can do to cut your audit fees in halfIf your company's financial year ended in December, you're probably frantically preparing for your auditors to arrive. But did you know that 'your auditors spend more time preparing information and reconciling accounting records, than performing actual audit work?' So says Hayley Newton-Holroyd in the Practical Accountancy Loose Leaf. By simply preparing for an audit correctly, you'll not only save a significant amount of time, you'll also save up to 50% on your auditors' fee. All it takes is the following five things...

'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
  • Prepaid expenses
  • Debtors credit balances
  • Long outstanding debtors
  • Fixed asset register
  • Lease commitments schedule
  • Accruals schedule
  • Leave pay accruals
  • Revenue and COS graph
  • Repairs and maintenance
  • Legal fees schedule
  • Donations schedule
  • Insurance
  • Interest received schedule
  • Overseas travel
  • Related parties
  • Vat reconciliation
  • Loan account certificate

Get your copy of the Practical Accountancy Loose Leaf  today!


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