How to Prepare for a Successful Audit
How to Prepare for a Successful Audit
How to Prepare for a Successful Audit
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<strong>How</strong> <strong>to</strong> <strong>Prepare</strong> <strong>for</strong> a <strong>Successful</strong> <strong>Audit</strong><br />
2011 GGFOA Annual Conference<br />
Presented by Chris Hollifield, CPA CFF
• Planning, Planning, Planning<br />
• On-Site Work – Be Ready<br />
• Wrap-Up, Get r done!<br />
Keys <strong>to</strong> Success
Planning<br />
• “He who fails <strong>to</strong> plan, plans <strong>to</strong> fail” Proverbs.<br />
• Internal <strong>Audit</strong>, Risk Assessment<br />
• Your Office<br />
• Other Offices<br />
• Planning meeting with your audi<strong>to</strong>r and key staff – be<strong>for</strong>e yearend<br />
• No Surprises!
• What <strong>to</strong> discuss<br />
Planning Meeting<br />
• Scheduling, Calendar<br />
• Who will do what<br />
• Deadlines<br />
• Schedules <strong>to</strong> prepare<br />
• Risk, Fraud<br />
• Changes, internal and reporting<br />
• Management comments from prior year<br />
• Notes from prior year. What did and didn’t work last year
• More than just dates<br />
Planning - Scheduling<br />
• Who will do what and when – be specific, have deadlines<br />
• Both internal and external<br />
• Calendar of Documents – when they will be ready<br />
• Team Work<br />
• Determine potential scheduling conflict such as vacations,<br />
conferences, work schedules.<br />
• Ensure the time frame is reasonable. Rescheduling is <strong>to</strong>ugh.<br />
• Put scheduling in writing if necessary
Planning - Schedules <strong>to</strong> <strong>Prepare</strong><br />
• You should receive a document request list or prepared by<br />
client list (PBC) from your audi<strong>to</strong>r.<br />
• Go over the <strong>for</strong>mat needed <strong>for</strong> schedules. The more electronic<br />
or working <strong>for</strong>m (ex. Excel) is better.<br />
• Understand what your audi<strong>to</strong>r is doing with these schedules<br />
• Update written internal controls.<br />
• Be sure <strong>to</strong> have reconciliations or documentation <strong>for</strong> each<br />
balance sheet account.<br />
• More than just a general ledger prin<strong>to</strong>ut.
• Be Ready!<br />
On-Site<br />
• Ask staff <strong>to</strong> work cooperatively with the audit team during their<br />
time on-site.<br />
• Provide them with what they need and how they need it.<br />
• Select one individual <strong>to</strong> be the primary liaison with the audi<strong>to</strong>r.<br />
• Need <strong>to</strong> be available when audi<strong>to</strong>rs are on site<br />
• Make sure your audi<strong>to</strong>r knows of any outside regula<strong>to</strong>ry<br />
agency inquiries.
On-Site<br />
• Be prepared <strong>to</strong> discuss changes in:<br />
• Internal controls Key personnel<br />
• Operational structure Grant programs<br />
• Be prepared <strong>to</strong> discuss significant estimates used in the<br />
financial statements.<br />
• Explain significant actual-<strong>to</strong>-budget and prior-year variances<br />
• Differences in expectations.<br />
• Be open during your audit interviews. You are both working<br />
<strong>to</strong>ward the same goal of strong internal controls and financial<br />
reporting.
On-Site<br />
• Be in contact with your audi<strong>to</strong>r throughout the year about<br />
complex or new issues that arise.<br />
• Don’t wait until during the audit <strong>to</strong> get advise on new implementations.<br />
• Have an exit conference<br />
• Journal entries<br />
• Management comments<br />
• No surprises<br />
• Are we on schedule
Wrap-Up<br />
• Go over schedule <strong>for</strong> after fieldwork.<br />
• What is left<br />
• To-do List<br />
• When will draft of report be ready<br />
• Communicate turn-around time.<br />
• <strong>How</strong> will changes <strong>to</strong> report be handled<br />
• Review of report and management representation letter<br />
• Meeting date <strong>for</strong> presentation<br />
• Who will submit report
•Success!
<strong>How</strong> <strong>to</strong> <strong>Prepare</strong> <strong>for</strong> a <strong>Successful</strong> <strong>Audit</strong><br />
2011 GGFOA Annual Conference<br />
Presented by Chris Hollifield, CPA CFF
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