Planning for Efficiency and Value in your Audit
By Jennifer Olivier & Melissa Murphy
Believe it or not, there are ways to make an audit an easier and more meaningful to your nonprofit organization. Read on for some tips from the auditors’ perspective.
Communication. We all know that communication is important in many aspects of life. During an audit, strong communication is critical to setting the stage for a smooth process. It is important to establish some key items and expectations up-front:
- Who will be the key contact person at your organization and at the accounting firm?
- What is the Organization’s deadline for draft financial statements? Determine your organization’s needs and communicate that information early. This will help ensure the timing of work is appropriate.
- When are the items from the auditor’s request list due? Ask the auditors to prioritize their requests and agree upon expectations related to when information is available. Once timing is established, hold each other accountable to the timeline and address potential issues and delays before they impact your planned timeline.
- Where will the audit procedures occur? Certain procedures may be more efficiently performed remotely; therefore a hybrid of on-site and off-site work may be ideal.
- How often will check-ins occur? This is particularly important with services are being provided remotely.
- Why involve governance throughout the audit? Governance plays a critical role in a nonprofit and should be included throughout the audit process. Additional resources related to board governance best practices is available here: Board Member Fiduciary Duties | CLA (CliftonLarsonAllen) (claconnect.com)
Remember – communication is important to the audit throughout the year. Don’t wait for your audit to begin to call your accounting firm about significant or unusual transactions. New accounting standards, revisions to accounting processes, and program changes are some of the reasons you may want to reach out early. Engaging in conversations with your accounting professional early could help avoid surprises or potential delays in the audit process.
Technology. Love it? Hate it? Living with it? Regardless of your answer, there is no avoiding the fact that it’s continuing to transform our worlds. The audit process is continually evolving, and technology can bring value, efficiency, and security to an audit when utilized properly. Secure file sharing and virtual meeting platforms are just some of the tools intended to minimize disruptions to your organization. Additionally, investments in automated accounting systems are often a great way to improve your internal budgeting, operations, and reporting processes. Technology will not only improve organizational efficiencies and controls, but can also help with audit-ready accounting information. Read more at: Sage Intacct Blog | CLA (CliftonLarsonAllen) (claconnect.com)
Embrace Feedback. For some nonprofit organizations, an audit may be viewed merely as a regulatory requirement. As accounting professionals, we recognize that perspective exists. Our nonprofit accounting professionals are driven by our passion for the industry. We are humbled by your contributions to the world around us. Our hope is that nonprofits will see the value in an audit beyond your financial statements. You may receive recommendations and observations from an audit – whether identified as deficiencies or not. Embrace those observations and consider how they could not only impact future audits, but also your organization.
Melissa has over eight years of experience auditing, accounting and consulting with an emphasis on nonprofit organizations, including those with Single Audit and Yellow Book compliance requirements. She has worked with many nonprofit organizations including human service organizations, healthcare, community based and associations.
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