In a previous post we covered 6 ways to save money on your audit. Here are 6 more! Audits are a necessary evil for a lot of companies and a cost which can in some cases, seem excessive. So you probably want to know how you can save money on your next audit, right?
Well, here’s the good news. There are some ways that companies such as yours can help your auditors to reduce your audit fee without cutting down on quality, comprehensiveness and attention to detail.
- PBC Checklist: Auditors prepare a list of checklists, schedules and workpapers that they ask the company to prepare in advance of the audit process. Often a growing business is too busy to prepare them effectively and accurate. If you take the relatively short time needed to make sure your schedules are correct (beginning balances agree to last year’s audit, current year balances agree to the general ledger), then when the auditors review your information they should have fewer questions and less chargeable time spent reconciling discrepancies.
- Reconciliation: Make sure your sub-ledgers correspond with the general ledger and your accounts are all reconciled. The audit takes less time when your records are organized, accurate and easily accessible and thus cuts down cost.
- Prepare Your Financial Statements: Nowadays, according to Interpretation No. 101-3, “Non-attest Services,” under Independence Rule 101, (AICPA, Professional Standards, ET sec. 101 .05), if auditors prepare the financial statements with information provided to them by management, then they are providing a ‘non-attest’ service and this must be explicitly stated in the engagement letter they will send to you. If you want to save money, use the format from last year’s audited financial statements to prepare your current year’s financial statements. Most people dislike preparing the dreaded cash flow statement, however, so if you need help, at HMFRS we can provide a simple template to get you started and ease any pain in the process, as well as help you manage time and resources more effectively.
- Notes to Financial Statements: It takes time to update the notes for current year activity. Pre-preparation of your financial statements by you is an important time saver for the auditors and a cost-saver for you. For instance, you may want to prepare the lease, notes payable, and fair value schedules, to name a few.
- Responsiveness and Timely Co-operation: Be responsive to an auditors’ requests. Nothing eats up more time than when the auditor is waiting on the client to respond to requests.
- Compliance: Ensure you are in compliance with loan covenants, contractual agreements, etc. Review the Board Minutes and make sure they support major corporate events and decisions.
HMFRS understands that you are busy running your business and struggle to take the time to help make the audit run as smooth and quickly as possible. If you need help to respond to the auditors, HMFRS offers audit support to companies to take the pressure off and help you focus on what you do best. We have many years of first-hand knowledge and experience with auditors and can help alleviate the headache from the audit process, as well as help you save money, so you can carry on with your day to day operations.