Start your engines!! Before the Audit Process Begins Getting ready…Do’s & Don’ts DO: Make sure you have documentation or explanation for all non-trivial balances on the financial statements. We must have audit evidence that is sufficient and appropriate to provide a basis for our audit opinion. Have year-end statements for ALL (that means ALL) cash and investments. This is still the #1 issue that holds up audits! One of the audit “assertions” is EXISTENCE. We must verify that the asset exists. You, the manager and the Board should also want to know that the asset exists. At least quarterly the Association should receive some type of verification of the asset balance. And, at the very minimum, get documentation at year-end. DON’T: Expect the auditor to “fix” the financial statements. This are YOUR (the Association’s) financial statements. The Association is responsible to ensure that the financial statements are free from material misstatement. We must maintain our independence and cannot be the bookkeepers. Do NOT make adjustments after issuing reports. IF you make changes after you have issued the reports to the Board and/or for audit, then you must retract those reports and re-issue. Do not give us reports that don’t agree. This is closing in as the #2 issue. We have to comment in the Report of Internal Control when this happens. This is something directly under the control of the Accounting Department (unlike some of the other audit issues that come up).
Start your engines!! Before the Audit Process Begins Getting ready…Do’s & Don’ts DO: Make sure you have documentation or explanation for all non-trivial balances on the financial statements. We must have audit evidence that is sufficient and appropriate to provide a basis for our audit opinion. Have year-end statements for ALL (that means ALL) cash and investments. This is still the #1 issue that holds up audits! One of the audit “assertions” is EXISTENCE. We must verify that the asset exists. You, the manager and the Board should also want to know that the asset exists. At least quarterly the Association should receive some type of verification of the asset balance. And, at the very minimum, get documentation at year-end. DON’T: Expect the auditor to “fix” the financial statements. This are YOUR (the Association’s) financial statements. The Association is responsible to ensure that the financial statements are free from material misstatement. We must maintain our independence and cannot be the bookkeepers. Do NOT make adjustments after issuing reports. IF you make changes after you have issued the reports to the Board and/or for audit, then you must retract those reports and re-issue. Do not give us reports that don’t agree. This is closing in as the #2 issue. We have to comment in the Report of Internal Control when this happens. This is something directly under the control of the Accounting Department (unlike some of the other audit issues that come up).
super-charge-your-accounting-10-23-16-acct-class-handout.docx