6 Ways to Ease Audit Workload Compression during Busy Season
With the start of busy season just around the corner, planning is on most practitioners’ minds. I have recently spoken with many professionals about ways they jumpstart their upcoming audits. Outlined below are some activities to begin now that will make your busy season a little less hectic.
Ask your clients to fill out background information forms. If there have been changes to their management, ownership structure or board of directors, ask clients to document them before busy season begins. Also, if your client has entered a new market, they should note these changes as well. You can provide your clients with the prior year documentation and transfer information to the new form as soon as it is available.
Start your walkthroughs early. Ask your clients to update their memos on processes before busy season begins. Then set up or modify walkthroughs based on this new information. Schedule these as soon as possible since they can be performed with data from any time of the year under audit and don’t rely on final year-end information.
Complete audit confirmations now. Compile your clients’ bank account information including addresses, account numbers and the names of contacts at various banks ahead of time. If your firm uses the traditional paper confirmation process, input this information into the templates once they are ready. If your firm uses an online audit confirmation system, upload the bank information onto the platform at this stage. Also review prior year returned confirmations to see if there were any issues noted with the specific bank so any conflicts can be avoided in the current year.
Take a look at your client’s most recent financial statements. Review their balance sheet and income statement to see if you notice anything that may require additional audit procedures. Keep high risk areas such as revenue and accounts receivable in mind. Be aware of increased deposits or liabilities which may indicate that significant agreements or contracts were entered into during the year.
Obtain the agreements your client entered into during the year. If the agreements are significant, summarize them for your permanent file. Additionally, if your client entered into a complicated rental, management, franchise agreement or other agreements that are monetarily significant, set up work papers with expectation recalculations before busy season.
Review recent changes to standards. Are you familiar with the updates that were made to compilation and review standards and the clarified statements on auditing standards? Peer review results continue to indicate there are outstanding issues with the standards not being properly implemented. Now would be a good time to assess these changes so you aren’t scrambling to do so in the midst of busy season. Check out the AICPA Private Companies Practice Section’s Invigorate the Quality on Focus toolkit with peer review information and more.
Busy season can be stressful, but with thoughtful planning you can take steps to manage the workload in advance. What steps are you taking to prepare for busy season?
Kari Hipsak, Manager- Firm Services, American Institute of CPAs.
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