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Is the Vatican ready for its audit, or will the Pope be coughing up thousands in audit fees?

by , 20 November 2013
US accounting firm Ernst & Young is getting ready to audit the finances of the Vatican City, with its 19 000 accounts. Apparently Pope Francis wants to clear financial skeletons out of the Vatican's closet... But is the Vatican prepared for the audit? Or will it be coughing up thousands in audit fees? And will you do the same when SARS knocks on your business's door?

If you're prepared when your auditors arrive, you'll save the audit team time and reduce your audit fees, say the experts behind the Practical Accountancy Loose Leaf. And with the new Tax Administration Act in place, there's a greater onus on you to make sure all your tax numbers are 100% correct.
That's why it's so important to have all the right documents, ready early – so your auditors can sign off on your finances and give you the thumbs-up (without it costing you the earth!).
Use this checklist to prepare for your annual audit BEFORE the auditors walk through your door.
Do you have? Yes No
Trial balance at year-end (including opening balances) – preferably in an electronic format. Your accounting package generates this for you.    
Detailed general ledger for the year under review – supply it electronically.    
Copies of the minutes of management and directors' meetings for the year under review up to the date of the audit.    
Summary of directors' emoluments. Provide emoluments per director and per type of remuneration for the year.    
A list of legal disputes, including details and amounts involved. Also, a list of attorneys you currently use and their contact details, including labour attorneys. You should disclose your commitments and possible contingencies in your financial statements where appropriate. Your auditors need this to check the accuracy and completeness of these disclosures.    
A schedule of directors' interests in contracts. This is a list of contracts the company enters into that directors have an interest in. The register of interests is contained in your company register.    
Prior years' tax assessments and provisional tax returns (where your auditors don't keep your taxation records).    
Details of any significant events that occurred after year-end. E.g. the company lost a significant contract or key customer after year-end; a warehouse at one of your branches burnt down and will take eight months to be rebuilt and become functional again; new technology on the market has rendered your products obsolete and you may need significant stock write downs in the future.    
Workmen's compensation assessment. Request this from the Department of Labour.    
By having all these documents on file and ready for your auditors, you'll be able to shorten the time they'll be in your office. And even the Pope wants that. 

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