Five Ways to Get Audit-Ready Rapidly
By Paul Johnson
CPA, CGMA, MBA
Audits are a fact of life, even for companies not strictly required to perform them. A careful review of finances reveals if and when mistakes have been made. Conversely, it reveals when and where opportunities or obstacles may lie. Every company benefits from taking a deep look at the books, but that doesn’t mean it’s easy.
Accountants have to gather, organize, and analyze months or years worth of financial data. Each step in the process takes time and creates the risk of error, which can both lead to big penalties if the audit is legally required. And even when the process goes perfectly, completing an audit is a huge distraction and disruption. Companies want and need to perform audits, but for understandable reasons they tend to dread and avoid them.
If your company fits in this category, it’s time to embrace a different approach. Here are five ways to improve and expedite every part of the audit:
- Revenue Recognition – Auditing revenue accounting requires a clear paper trail through a complex network of transactions and payment schedules. Variances in GAAP-accounting practices make things even trickier. Working with an automated accounting system set up specifically for complicated revenue recognition ensures that the details shine though the complexity.
- Accounts Receivable – An audit of accounts receivable must include allowances for uncollected accounts. It also has to recognize when a payment covers multiple accounting periods. An accounting tool that applies cash receipts to client invoices automatically creates clarity instead of confusion.
- Consolidation – Consolidations often involve immense amounts of data organized into a dense series of spreadsheets. This approach makes spreadsheet errors inevitable while making it almost impossible for auditors to find clear connections. When the consolidation process is automated instead it produces organized reports that lead auditors into the root data.
- Pace – Audits are expensive, time-sensitive, and distracting, creating a powerful incentive to finish them fast. A well-organized accounting system accelerates any kind of audit. And if it lets you create sub-ledgers for something like receivables, auditors can start on that section of the books before you complete the final close.
- Presentation – Improving your audit is about making things easier for both your accountants and your auditor. The more errors and inconsistencies your data contains the more time auditors have to invest double-checking your figures. The same thing happens when data is disorganized. A system that makes things easier for you ideally does the same for your auditor.
Imagine if auditing was easy, automatic, and almost instantaneous. You could comply with lawyers or regulators without stress or anxiety. You could also investigate your data for financial insights on demand.
All of that is possible when you utilize Sage Intacct for auditing specifically and financial management generally. If your next audit is approaching, contact Atlasphere Consulting soon.