Preparing for your audit

30th January 2024

With audit season kicking off for December year ends, and March year ends fast approaching, Chrysanthi Herodotou, Financial Services Senior Manager, looks at the audit process and how best to prepare.

1. Communication with your auditors

Regular and clear communication with your auditors before, during and after the audit process will help it run smoothly and effectively. Providing information to auditors on a timely basis ensures audit teams can make best use of their time during the audit fieldwork phase. At haysmacintyre, the audit team uses the Inflo software for file sharing and for uploading deliverables lists ahead of the audit. This aids in the efficiency and ease of file sharing, while still maintaining confidentiality and transferring the information securely. Getting as much of this information upfront will enable the team to ‘hit the ground running’ during the scheduled audit fieldwork.

The earlier your team is able to prepare balance sheet reconciliations and finalise the draft year-end numbers, the better. This will put you in a strong position to identify any anomalies early on and allow good time to obtain accounting advice if necessary.

2. Remote auditing

Cloud-based data analytics and file-sharing software is now commonplace, and not only provides a secure platform for sharing audit deliverables, but also helps to facilitate the remote auditing process.

Here at haysmacintyre, our software of choice, Inflo, enables us to request, and you to upload, audit documentation – avoiding the transmission of confidential information via email. Only named individuals are provided access to this software to ensure that the information remains ringfenced and secure. If used to its full capabilities, Inflo also enables the audit team to select transaction samples based on our risk assessment, these can be sent to you in advance of the audit fieldwork to expedite the process.

3. Timetable and service provider liaison

A timetable for the audit will be agreed with you. It is important to notify any third-party service providers of the relevant deadlines, including:

  • Bookkeepers
  • Payroll providers
  • Corporation tax compliance advisors
  • Fund administrators

This will ensure that they will be ready to provide any documentation required for the audit and help prevent delays. Note: where haysmacintyre also provide these services there is no need to communicate these deadlines as we will do this internally on your behalf.

4. Cost of living and current economic impact

One of the key areas of an audit is management’s assessment of going concern. Within the current economic climate this is more important than ever. Those charged with governance will need to consider the impact of the wider economic factors on the financial statements and, more specifically, indicators of any of the following:

  • Going concern implications
  • Impairment of investments, properties and intangibles
  • Allowance for potential irrecoverable debt
  • Fair value adjustments
  • Increased cost of borrowing for external finance and associated covenant implications

The going concern assessment should consider all relevant information about the future which is at least, but not limited to, 12 months from the date the financial statements are approved. This should include detailed budgets and cash flow forecasts.

The assessment as to whether an entity is a going concern considers events that occur after the end of the reporting period. Where management are aware of material uncertainties that may cast doubts on the entity’s ability to continue as a going concern, the entity should fully disclose the material uncertainties within the financial statements.

Having these recommendations in mind and starting preparation before the audit process begins will ensure you are in a favourable position for the upcoming audit.

Awards and Accreditations

Accounting Excellence Large Firm of the Year 2023
eprivateclient top accountancy firm 2023

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