Keeping Your Auditor Happy

How can one make the audit process reasonably stress free? By providing your auditor with the records and information they require at the start of the audit. Listed below is the information that can be useful. This is not a comprehensive list as there will be information that is unique to your organisation or industry.

• Copy of draft accounts including statement of financial position, statement of financial performance, statement of movements in equity, statement of cash flows and notes to the financial statements.
• Trial balance which has been referenced to the amounts included in the accounts.
• Details of all general ledger accounts included in the trial balance (i.e. full general ledger printout) or access to a computer to enable printouts of general ledger accounts as required.
• Work papers to support the amounts included in the statement of cash flows.
• Copies of all minutes of meetings held during the period under review.
• Schedule specifying individual accruals which agrees with the financial statements and appropriate documentation to support the individual accruals.
• Reconciliation between the creditors ledger and the trade creditors balance in the financial statements.
• Invoices to support major individual trade creditor balances.
• File of all unpaid invoices at the time of the audit visit.
• Copies of all GST, FBT and other tax returns filed for the year.
• Detailed calculation of tax charge in the statement of financial performance.
• Reconciliation between the fixed asset register and the fixed asset balances in the financial statements.
• Copy of the detailed fixed asset register including all additions, disposals, depreciation expense and revaluation’s during the period.
• Documentation to support major fixed asset additions and disposals.
• Certificates in support of investments.
• Work paper detailing inventory/stock holdings by type, weight, costs, selling price, NRV (net realisable value) and location at balance date.
• Copy of the trade debtors aged trial balance.
• Reconciliation between the trade debtors aged trial balance and the trade debtors balance in the financial statements.
• Listing of all specific provisions for doubtful debts.
• Work papers specifying all prepayments and sundry receivables.
• Copies of all bank statements (including those immediately after the year end).
• Bank reconciliations for all bank accounts existing at balance date.
• Reconciliation between the payroll records and the payroll expense in the trial balance.
• A few biscuits (preferably chocolate!) with morning tea.

It is of great help during the planning of your audit if draft financial statements are sent to your auditors as soon as possible. Quarterly management financial statements are also of great assistance in helping your auditor to monitor how well you are performing during the year and keeping them up to date with your organisation.

By having the above information ready prior to the commencement of the audit, you can minimise time and cost, and keep your auditor happy!

If you do have a disagreement with your auditor on an accounting matter, see the auditor disagreement section.