Audit Preparedness and You (or What Does PBC Mean and How to Make Your Auditor Jump with Joy)
- December 20, 2011
- Carol Barnard
- 2,368 Views
Audit season is starting up for those of you with 12/31 year ends. Nothing really rings in the New Year like rolling forward those net asset schedules, am I right?
I realize it can’t be easy for each side of an audit to understand what it is like from the other perspective unless you’ve been on both sides of the table. To give some insight from the auditor’s perspective that might help you understand where your auditor is coming from, as well as the importance of audit preparedness and your role in it, I thought it might be helpful (and fun!) to go through some common audit misconceptions.
Contrary to belief –
- Don’t hold back or parcel out prepared items. Auditors LOVE an onslaught of information. I’m not kidding. Walking into a conference room with piles of documents already pulled and waiting is like an auditor’s Christmakkuh. Yes, that’s sad, but it’s true. Just think of the joy you could bring!
- Your auditors are not asking for items they don’t actually need. Your auditors understand and appreciate that you still have your normal job tasks to do while working on the audit. Wasting your time is not an auditor’s objective, I promise.
- The week of fieldwork is the time scheduled for the audit to take place. It is NOT the week that you get started preparing for your audit.
- Providing a requested item on the last day of fieldwork, or weeks (or months) later, does not count as “timely”.
- The PBC list (Prepared/Provided By Client) is intended to help you get prepared, your auditors will realize (quickly) if you haven’t read it.
- It may not be immediately apparent that this stack of items you’ve brought over is intended to support that particular balance or fulfill that request. Identifying what is being provided is tremendously helpful. It also reduces the chance of being asked for something you’ve already provided. We know you hate that and we try to not do that.
- What you have provided may not be exactly what your auditors were looking for. That is no one’s fault but that’s why it’s still on the open items list. There are frequently many differences in terminology and systems from company to company, or it may be about trying to target a specific population or procedure and a different approach may be needed.
- Your auditors work really hard to make you feel like you are their one and only client … and I hate to be the one to tell you this…but here it goes…that’s not likely the case. Not getting everything to your auditors in the allotted time means them trying to schedule available work time in and around someone else’s audit time.
- Your auditor is not interested in antagonizing you. No, really. Or if they are, they are giving us all a bad name. What you have become accustomed to may be something your auditor rarely sees. Styles of communication may vary and it may be helpful to try to narrow down an objective. Chances are high that you have insight into what particular report will provide the information that best addresses the request.
- Some of you ARE actually prepared and timely! It can and does happen! And your auditors know it and appreciate the effort.
The biggest take away message is this: delays in receiving requested items or time incurred in helping get a schedule corrected all add up quickly. Your auditor still needs time to actually perform the work required of them. It is important to understand that getting the schedule is just the beginning of the work your auditor needs to do. Being prepared for an audit is one of the best ways to help ensure that the process is a smooth one, or at least as smooth as it can be.