Kicking off The New Year and Preparing for Your Annual Audit: CEO Perspectives
Perspectives from InnoVergent CEO Paul Cammisa
Yes, it is now 2017 and you are just getting used to writing 2017 instead of 2016. You are finishing up your year-end closing, consolidations and reporting. Time for a quick breath, but not for long because now the fun begins… audit time!
I know that I am exaggerating, but as a former accounting executive, I have dealt with it for many years from your perspective. It is a hard charging time of year just to get the year closed out and the reports finalized and issued. Then I had to deal with defending and supporting all those numbers and reports while explaining all of our internal controls and processes to the auditors—usually the ones right out of college being trained on my engagement.
This is a great time of year to reflect on making sure that you are doing all of this the most effective and efficient way possible striving to make it fast, easy and powerful all at the same time.
As it relates specifically to the audit task at hand, here are the top 3 things that I recommend you consider going into it:
Evaluate your resources
This usually breaks down into people, process and technology. Do you have the right people available to facilitate the audit? Have you allotted their time to make sure it gets done correctly and in a timely way? Did you set up the right processes to facilitate scheduling and regular communication between your team and the auditor? Have you leveraged all of your technology resources to provide the auditor with access to what they need, when they need it and in the format requested?
Set up a clear calendar of events, deadlines, meeting and milestones to mitigate any misunderstandings. Communicate this to all of the parties involved and get sign off by everyone who is participating. Start with end in mind and work backwards to ensure that you have the audit opinion completed and signed off on when you need it for any/all filings of your audited financial statements.
Agree on the main objectives
Confirm with your team and the auditors as to what the objectives are so that you stay focused on end result. This will help your team and the auditors to not get distracted into other relevant areas that can cause your deadlines to get delayed and the audit fees to grow out of scope.
As you go through this annual exercise, it is a great time for introspection from your team and I suggest that you ask your team to look for ways to improve over the next 12 months… but don’t get into that discussion until you complete the audit. Don’t forget that your auditors are probably going to provide you with some outside perspective on how to improve. Combine all of this input into a comprehensive plan for improving your operations in 2017. Don’t forget to let us know how InnoVergent can help. We have been there and continue to develop industry best practices that we are happy to share.
Let’s make it a great 2017… together.