A: Audit preparation is key to maintaining reasonable audit fees. To prepare for your audit, ask your auditor what information you will be required to provide. Many auditors prepare a list of those records which they will need to examine, forms which you will need to complete, and questions you will need to answer. Complete, accurate, and accessible records and other information prepared well in advance of the audit will help ensure that the process goes smoothly and more quickly, reducing the financial and emotional cost of an audit.
Examples of what an organization can do to control the audit cost include:
• Preparing the confirmation letters to banks, funders, attorneys, etc.
• Maintaining documented policies and procedures, including those related to internal controls
• Maintaining detail for financial statement numbers, including accounts receivable, property and equipment, accounts payable, deferred revenue, grants and contributions, donated goods and services, inventory, payroll.
Review all information to make sure there is support for all amounts recognized. Prepare all supporting workpapers and make sure all supporting documentation is available and organized. Prepare all information electronically.
Remember that a CPA firm cannot be both the accountant (bookkeeper) and auditor – auditors cannot audit their own work and cannot make management decisions. In addition, an organization must have proper safeguards to ensure that someone on management and/or the board is technically competent to accept responsibility for accuracy of financial data.