Most companies actually dread year-end audits. You will find that Finance organizations are usually off-limits during this period as they struggle to make last-minute adjustments, prepare supporting schedules, find source documents, and review a year’s worth of transactions. Stressed, pressured, and burned-out, risk of errors increase. Overall — an unpleasant experience.
But year-end audits should not be disruptive. Nor preparations should be done, well, at year-end. To ease the stress during this period, below are simple changes and process improvement that your Finance organization can adopt.
Plan your audit activities & deliverables and discuss with those who will be involved so they know what are expected of them. A checklist of audit requirements and due dates that everyone, including your external auditors, can refer to is most helpful as it will keep people focused. Schedule regular update meetings and use the checklist to track progress.
Leverage on available (and affordable) technology. Reduce reliance on excel spreadsheets by investing in an accounting system that best fits your organization. Most systems now come with subsidiary ledgers and customizable reports that will not only reduce time spent on data preparation but will also increase the accuracy of your information. Documents-scanning technology (within your accounting system or as a separate software altogether) is also helpful when retrieving supporting documents requested by your auditors.
As mentioned, preparations for the year-end audit does not have to be done at year-end. Embed automation, control, and period-end tasks within your day-to-day activities. By adopting continuous accounting, you will be “audit-ready” any time of the year.
Year-end audit process will include review of your quarter one results right after the period under audit. Make sure you don’t neglect your usual closing activities while attending to the requests of your external auditors.
Most of all, immediately after the conclusion of every year-end audit, take a moment to review, evaluate, and list down learnings and areas for improvement — both within your organization and with your external auditors — for an even more hassle-free year-end audit next time.
How we can help? Developing and implementing a solid finance transformation agenda is the hallmark of our ACCOUNTING SERVICES model — we build, operate, and transform fundamental capabilities in people, processes, and technology. Contact us to know more about these services.