WENDY SMITH, Director of Accounting and Financial Advisory at Deloitte in the Western Cape, advises Financial Managers to conduct an ‘audit-readiness’ review to ensure a smooth audit process and
clean audit report.
For an overwhelming majority of companies, the annual audit is not only a challenging and time-consuming process, but also one that can frequently result in costly delays.
By taking the necessary steps to ensure that the company is ready for audit before the process begins, Financial Managers can ensure a better quality audit.
Deloitte’s Accounting and Financial Advisory division conducts audit-readiness reviews on behalf of an increasing number of non-audit clients who value the professional input prior to the audit. Many of these are Financial Managers who do not have the capacity internally to adequately prepare for the audit, or who value the professional assistance during the audit while they continue to manage their day-to-day responsibilities.
“Financial Managers today have streamlined finance teams who do not necessarily have the additional capacity to deal with the extra demands of preparing for and dealing with the annual audit process. In addition, most are simply too busy to be able to stay fully abreast of on-going technical updates and in particular, IFRS requirements. It is for these reasons that many benefit from the assistance, technical advice and support that we are able to offer not only in advance of the audit but sometimes during the process itself,” says Smith.
“In effect we conduct an independent and objective ‘mini-review’ that allows the company to address issues prior to the audit, thereby serving to streamline the audit process and to minimise queries and issues that may arise.
“While the service is always tailored to the client’s particular requirements, it will generally begin with a thorough understanding of the business, including any points that may have been highlighted during the previous year’s audit. Having established the status of the company’s accounting records and its compliance with regulatory requirements, we will then prepare and action a project plan designed to deliver a final trial balance with supporting lead sheets, and where applicable, supporting documentary evidence. At the end of the process, clients receive a ‘ready for audit’ file that they can present to the auditors,” says Smith.
She notes that the service is particularly valuable in situations where a company may have undergone a difficult audit process in the previous year or where it has been subjected to a restructure or systems’ changes during the year.
“We know that where Financial Managers are able to prepare well for an audit this does result in a far more efficient and streamlined audit process. This translates into an effective audit experience with deadlines being met, minimising reporting issues and contributes to limiting any audit fee overruns,” she concludes.