Depending on the size of your organisation and your record keeping and processes, the external audit can be a grueling process and take many days. It is therefore important to dedicate a quiet space for the auditing team at your offices. Preferably, this should be a secure room that can be locked at the end of each day. This ensures that confidential information can be kept safe, and the integrity of the data and the documents can be secured at the end of each day. That said, what else can you expect onsite?
Don’t be alarmed that your auditors will have several queries throughout the process as they work through the documentation. They will also ask you to locate physical assets and may request you to identify the individuals working in the organisation (as a means to verify individuals on the payroll). It is essential for them to obtain clarity and it is helpful for your organisation to probe any issues and assess what is needed. It is important to answer requests for information timely, honestly and with accuracy. This process is incidentally a very helpful one to the organisation, and should be viewed as a mutual step to reaching the ultimate goal of closing accounts satisfactorily.
The fraud and error interview
As part of the audit, your external auditors will conduct a fraud and error interview. They will not provide you with questions before hand, but will interview the Finance Director and other relevant management and staff members. The aim of this interview is to assess the organisation in terms of adherence to company policies and procedure and if this could compromise financial information, integrity and decision making in any way. If there is one key element to guide you during this process, it is to be honest. Completely honest. As much as an audit process is a ‘check’, it is also a valuable process to help you assess your organisation and ensure accountability and good governance. The auditor may check in with his internal risk assessment team, to evaluate any issues and come back with suggestions.
Are there other considerations you’re making as you prepare for your audit? Have you considered these three key points as part of your preparation?
- The External Financial Audit Part 3: Be part of the discussion
- The External Audit Part 4: Report and Implementation
Author: Soraya Joonas, Finance Director at Inyathelo.
Extract from the article first posted on the Inyathelo Blogspot on 6 June 2016.