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Organization (First 48 Hours)
Communication & Management
- Designate a single point of contact for all auditor requests
- Create a tracking system for all outstanding PBC (prepared by client) items and requests
- Schedule daily status meetings with your internal team
- Establish clear priorities for addressing audit requests
- Set up a communication channel (Slack) for real-time updates
Documentation Triage
- Organize existing documentation by financial statement area
- Create a centralized repository for all audit-related files
- Develop a naming convention for all uploaded documents
- Identify and flag missing documentation for immediate attention
- Prioritize high-risk areas that typically receive the most auditor scrutiny
Critical Financial Areas (1st Week)
Balance Sheet Focus
- Reconcile all cash accounts with supporting bank statements
- Review accounts receivable aging and support for bad debt reserves
- Verify inventory valuation and supporting count documentation
- Confirm fixed asset additions/disposals have proper support
- Ensure all debt agreements are accessible with covenant calculations
- Document accrued liabilities with subsequent payment support
Income Statement Focus
- Prepare variance analysis for significant fluctuations
- Document unusual transactions with comprehensive support
- Review revenue recognition for compliance with accounting standards
- Analyze sales cutoff at period end with supporting documentation
- Document significant expense variances with business justifications
Process Efficiency (2nd Week)
Managing Audit Adjustments
- Create a system to track proposed adjustments
- Develop a review process for evaluation and approval
- Update reconciliations to reflect approved adjustments
- Maintain documentation of adjustment discussions and decisions
Streamlining Information Requests
- Batch similar information requests to minimize disruption
- Schedule focused time for document preparation
- Review all deliverables before sharing with auditors
- Prioritize requests based on audit critical path
Wrapping Up (Final Stages)
Financial Statement Review
- Conduct comprehensive review of draft financial statements
- Cross-check disclosures against source documentation
- Verify that all approved adjustments are reflected
- Review MD&A for consistency with financial results
Audit Completion
- Address all open items on the PBC list
- Document resolution of auditor questions
- Schedule final discussion of audit findings
- Prepare management responses to identified issues
- Document lessons learned for next year's audit
Post-Audit Follow-up
Continuous Improvement
- Conduct a team debrief to identify pain points
- Document processes that worked well (and those that didn't)
- Create an action plan for pre-audit preparation next year
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