Common Mistakes to Avoid When Preparing For an Audit
In this blog, we will discuss the mistakes your organization should not make during an audit
Mistakes happen in life. One could say it is even part of the human experience. However, in some circumstances, it would be beneficial to ensure that some slippages do not occur. During an audit, it helps to be as precise as possible. Both for your benefit and the auditors.
Here are some mistakes that your organization should do its best to avoid during the auditing process:
CPAs and Accounting Firms Are Not Just For Audits
Communicating with your CPA or accounting firm only during the time your audit is taking place is something to avoid at all costs. Remember, your accounting firm are the experts and is up to date on all new laws and regulations, procedures that need to be followed, etc. Be in consistent contact with them to help you prepare for the audit to begin with, you never know what you may miss or do incorrectly by going at it alone.
It is important to get ahead of the game as being aware of new accounting regulations and compliance agreements will prove to help your organization in the present and down the line. How so? The earlier you make improvements to your preparation process and become aware of new laws and regulations, the faster your organization will be running much more efficiently.
Waiting Until The Last Minute
Does your organization have all the necessary documentation you need for the audit? If you are asking that question just a mere few days until your audit, that could be problematic. Internally, your organization must have procedures in place to get ready for an audit. Such as organizing documentation for the auditors and making it easy for them to understand. You can read more about here.
Waiting until the very last moment will be an opening for inaccuracies, rushing, and the mishandling of documents. This leads to another mistake to avoid, not emphasizing accuracy.
Not Emphasizing Accuracy
Sometimes things just have to get done, a lot of the time in many areas of life, people will sacrifice the quality of something for the sake of just finishing it or to be submitted on time. When it comes to an audit, however, this should not be the mindset your organization takes to heart. This is why not waiting until the last minute is so crucial, the accuracy of documentation can not be stressed enough. Auditors are there to ensure that your organization is doing what you say you are doing and trying to understand your financial situation. If you have inaccurate documents, you will be prolonging the auditing process with perhaps even more consequential actions down the line.
This is why the reconciliation of all your documents is needed. Be sure that records match when they are cross-referenced to ensure the accuracy of them. Every organization is different, with different goals and people within them, so there is no one step of procedures to have in place. It is not a one size fits all. Although, you do need to have a system in place to be sure that your documents, statements, etc., are accurate. The next time you think about how early you want to prepare in advance, remember the longer you wait the higher the chance there is for inaccuracies. See how they bleed into the other? Auditors do not want to see financial statements that do not line up with other documents, they want to see consistency. Putting in the time and effort to ensure accuracy across the board will benefit you during the audit process and in the future. As inaccurate information submitted to the auditors can spell out a longer and much more time-consuming process.
When preparing for an audit, these are mistakes that your organization should do its very best to avoid. We know an audit can be a rather exhausting endeavor, but sometimes it is necessary. Do not make it harder on yourselves, and be sure to watch out for these mistakes. Ask yourself if you have taken steps to avoid these mistakes.
If you have any questions or if MBSATA can assist you in any way, please reach out to us at email@example.com