How To Prepare Your Business For An Audit

business audit

Auditing is an essential part of any business to maintain efficiency. It’s a way of looking at a company’s operations and processes to ensure all systems are well-oiled and functioning optimally. Hence, you’ll need your company’s reports and data. Without performing an audit, you can misjudge and misrepresent your company’s performance. Notably, you’ll get the impression that your business is more profitable or thriving than it truthfully is.    

Moreover, whether you conduct an internal quality or regulatory audit, preparing your business for an audit can be overwhelming, especially if you have a small team. Auditing requires plenty of paperwork and takes up a considerable amount of your time. But fortunately, businesses today can perform audits efficiently using audit software. With audit software, you can easily have the necessary documents in one place without dealing with large piles of paperwork.

Nevertheless, whether you want to invest in audit technology or not, preparing for an audit is necessary to ensure that your company breezes through the process successfully. So, to help you prepare your business for an audit, below are a few steps you can take.    

Keep A Calendar    

There are no fixed rules regarding how often your company should conduct an audit. Nevertheless, various factors will influence how frequently you’ll need to audit. For instance, suppose you’ve received certification from an industry-standard organization like PCI Security Standards Council. In that case, you’ll need to have an audit conducted by your qualified security assessor yearly to ensure that you stay in compliance. Also, to determine whether goals and procedures meet regulatory compliance and company policies, you may have these assessors performed either quarterly or, at least, twice yearly.      

Know the types of audits your company needs and when you need to undergo these. Commonly, audits are done toward the end of a fiscal year or at the beginning. Regardless of when, the point is to know when one is about to happen so that you can prepare the necessary requirements and equipment as well as tap the personnel responsible. For instance, you have to ensure that the laptops you’ll be using have processors that are capable enough for the upcoming tasks or that the department reports are on track.     

Gather And Organize Relevant Documents    

Once you know when to prepare, you move on to what to prepare. Preparing the necessary documentation in due time helps to improve the audit process. Thus, you should ensure that all your documents, such as accounting and finance records, human resource documentation, inventory records, annual reports, and others are in order. After gathering all the relevant files, arrange them as required, usually chronologically. Then proceed to confirm that all these are accurate and official, especially the transaction dates, letterheads, rubber stamps, VAT tax slips, document numbers, and authorized signatures.    

Particularly for financial records, it may be helpful if they’re prepared early to avoid last-minute questions. These documents may include new leases, loan agreements, significant sales contracts, insurance policies, legal documents, and notices from the Internal Revenue Service (IRS). Notably, external auditors are grateful when businesses prepare their papers to support transactions and account balances. The good thing is that your accounting team already has many of those financial documents.      

In addition, to improve the way you organize your documents, consider setting up a Google Drive that’s accessible to each of your team to store records of all transactions made and keep backups.    

Provide Training    

Internal auditing is an essential part of any information security and compliance program. It’s a practical approach to managing risk appropriately. The goal of auditing internally is to give insight into a company’s policies, culture, and procedures by verifying internal controls such as compliance with relevant laws and regulations, operating effectiveness, and risk mitigation controls. Thus, apart from setting up a schedule and preparing the necessary documents when conducting an internal audit, giving internal audit training to your team members is also worth considering. Internal audit training helps to ensure that your teams will provide an objective viewpoint when documenting problems.    

Moreover, the most beneficial internal audits are highly coordinated, well-planned events that minimize risk and disruption to the business operation. Hence, to conduct a successful internal audit, your teams must understand the basic process of internal audit. But beyond that, they must also understand how to document their observations, collect relevant information, and dig deep to provide valuable insights to ensure you’re living up to your company’s established policies and procedures.    

business audit software

Conclusion    

Overall, a successful audit can give your business several benefits, such as having error-free financial statements, reassurance to potential investors, and improvement in your company’s overall reputation. While external auditors are answerable for creating their findings, their job doesn’t revolve around preventing error or fraud. As a business owner, you’re the one who’s primarily responsible for ensuring all the information you give the auditor is accurate and factual. Therefore, you should take time to prepare and ensure all files and documents are accurate and up-to-date. On top of that, you may also consider investing in audit software to help streamline your audit process.