External Audit Support

Our audit support specialists work directly with your external auditors.

Many times the CFOs and Controllers of a company can be overwhelmed in preparing and going through the process of an audit.

CFOs and controllers have a very important job in that they must insure the accounting and finances of the company are in order, manage staff, and put out the day-to-day fires.

Where are they supposed to find the time to prepare for an audit?

Companies go through audits for several reasons, many of which include: 

• The company is public
• The company has bank debt
• Investrors require an audit
• You are selling your business
• Company executives require the audit for peace of mind

No matter the reason, if you are not prepared an audit can be a very stressful experience for not only you, your employees, but the auditors as well.

Problems may arise when companies do not have the resources available to to provide necessary audit support which may include: 

• Financial schedules
• Technical memorandums
• Financial statements
• Internal control documentation
• Company being audited is new to audit and unfamiliar with process

Where problems may occur...

Once the auditors arrive they will request that the entire items on their items needed list be given to them so that they can start field work. If items are not prepared or are improperly prepared the auditors will face "down time" and you could be charged a premium for that extra time.

Because of the stringent rules of independence the auditors cannot give advice or prepare the necessary schedules for you especially if you are facing a technical GAAP issue where you may be uncertain of how to account for the item.

The auditors may pull out of the field in some cases when the company not prepared. In this instance you may get a completely different auditing team than before. This leads to inefficiencies and a new team to relearn the business. Additionally, the accounting firms will sometimes charge for the downtime that they incur due to their scheduling conflicts.

CFOs or controllers may become frustrated with the auditors as it may seem as if they are asking questions on a case-by-case basis and bogging down the day-to-day routines of the operations. Proper preparations ensure that staff are not bogged down by the rigors of audit inquiries.

The auditors may ask you to pull support when you have in fact pulled what they needed. It is important to pull the support in a manner that may highlight what it is they may be looking for to speed up inefficiencies.

In some instances your company may be considered a small business and may not have policies or controls where segregation of duties exists. By not having controls documented or in place the auditors will assess risk at a higher level where they will test more than usual.

Proper preparation for an audit will reduce the frequency and amount of journal entries incurred and insure that the company is in-compliance with budgets and other financial covenants.