Audit Readiness Services

As your company grows, stakeholders, including investors, banks, and regulators, will become more interested in reviewing your financial statements. An audit of those statements may eventually be needed to give those stakeholders the confidence they need to keep you moving forward.

For that first audit in particular, and for those that follow, preparation is vital. A lack of audit readiness can lead to an audit that takes longer and could result in the identification of significant deficiencies and material weaknesses. Beyond paying higher-than-expected fees and taking additional time, such an audit could diminish stakeholder confidence and jeopardize whatever big step(s) you have planned.

For your audit, preparation can also be demanding. Many companies underestimate the time and access to records required to prepare for and support the audit process. Companies may be staffed for daily operations, and adding in audit requirements and requests may be overwhelming. Understanding and assessing the information an audit requires before that audit begins can help companies avoid problems along the way.

Being unprepared for your first audit can lead to:

• Delays in the completion of the financial statement audit
• Identification of internal control deficiencies
• Audit fees that are higher than expected

So what needs to be done in order to better set the stage for an efficient first audit? Consider these six steps:

1. Ensure your people have capacity to support the audit in addition to their daily duties.
2. Get on the same page with your auditor about timing. A timeline should have mutual commitment from the company and auditor.
3. Communicate openly and frequently about audit-related requests, status, questions, and concerns.
4. Prepare and gather documentation and/or process flowcharts that support the performance of internal controls.
5. Prepare a record of the company’s accounting policies, and formalize accounting considerations surrounding more complex accounting matters. One recommendation is to do this as they arise throughout the year instead of all at once at year-end.
6. Develop, retain, and organize supporting reconciliations and schedules for financial statements. Reconcile these to the trial balance, and ensure that you have sufficient evidence to support the recorded transactions. Complete the financial close process as you initiate the audit.

Many companies headed for their first audit figure they can handle this preparation using only their own internal resources. However, many of them end up with a challenging audit on their hands. Bringing in Deloitte’s audit readiness team could lead to a more predictable audit experience while freeing up internal resources for other business priorities.