One of the silver linings after the pandemic is that many businesses have permanently adopted some form of a remote workforce. In the accounting and audit industry, that translates to having audits being performed remotely, which presents unique challenges but also offers a breadth of enhanced “silver-lining” efficiencies as well. Whether your department has newly hired employees or seasoned veterans, you can successfully prepare for your upcoming remote audit with the following steps:
1. Plan, Plan, Plan
Because your auditors won’t be physically onsite to pull selections or support, it’s more imperative than ever to read and review the document request listings (PBC lists) provided to you to ensure there are no delays or questions on the items. If items are not available and ready by the start of your scheduled fieldwork, there is a serious risk of delayed ACFR issuance for the 2023 fiscal year. A great approach is to work with your IT departments in advance of fieldwork in order to set up ‘read-only’ access to your accounting software where we are able to access reports and view supporting documentation without necessitating an email exchange and the uploading of documents.
2. Stay on Top of GASB Updates
An item that goes hand in hand with item #1: it is more important than ever to stay on top of the new GASB issuances and work on implementing all required pronouncements in a timely and effective manner. For 2023, GASB Statements 94 and 96 are the new burdens for state and local governments and appear to be significant undertakings. The utilization of software companies to assist in implementation is a great place to start and the plethora of tools and guidance available on the GFOA and State websites should be thoroughly consulted. We are able to provide those links and answer any questions as needed!
3. Ensure Required Staff are Available and Responsive
The remote audit environment offers growth opportunities for how (well) people communicate across a variety of media. As fieldwork is being completed, email correspondence becomes increasingly important. Face-to-face conversations in the coffee room were efficient before Work From Home WFH became the norm. However, these days, staff and accounting personnel wherever they are will want to be available and responsive during the scheduled week(s) of fieldwork. To facilitate handling of open items, LSL provides daily updates, so the responsible finance personnel can react to or act on the request easily and quicky. The goal is for fieldwork to be completed in the scheduled week(s), to avoid delayed filing of the 2023 ACFR.
4. Save Reports as a Template
Creating a folder on your network drive and saving reports that were provided during the year is an excellent way to increase efficiency for subsequent audits. Having the reports to use as a template and reference is a perfect way to minimize re-work and alleviate stress on your finance departments. As many of these reports are only created once a year during audit time, it’s not always easy to quickly recreate them. If the reports are available to reference from prior audits, there is a much lower risk of follow-up questions from LSL, and this habit will also greatly assist any new finance personnel that may be new to the audit process.
5. Prepare Throughout the Year
Whether the audit is in-person or remote, audits can seem like a ton of extra legwork if everything is compiled at the last minute! Here’s the good news: Typically, the PBC lists are not dramatically altered from year to year, so utilizing prior lists and preparing throughout the year is a terrific way to alleviate stress when the full list is provided. As seen in #4 above, creating folders by audit section on your network drive and compiling items throughout the year is a good way to minimize the legwork during year end. For example, saving support for fixed asset acquisitions and dispositions as they occur will have those items already available for potential audit requests and will keep your personnel on top of activity, thereby lowering the risk of omitting transactions.
Final Recommendations and Thoughts
Following the steps above is the best way to ensure that your remote audit goes smoothly and efficiently for both sides. As we like to say, we are not the IRS, and our goal is not to write findings and detect errors. We want you to skate through your audit! We have an expansive breadth of knowledge and expertise within our firm that can be utilized by your finance departments for questions and guidance. Obviously, there are independence requirements we need to adhere to, but we strive to work as closely as we can to assist and aid your personnel to undergo a successful and efficient audit engagement. The ACFR is your all-encompassing report for the year and one of your most publicly accessed documents. Ensuring a timely and successful issuance is paramount to putting the proverbial bow on your City’s or Entity’s fiscal year.
If you have any questions, feel free to reach out and contact us!