You can take control of the audit process by meeting with the audit partner/manager and person doing the fieldwork—before the audit begins.
This meeting with people who will be responsible for doing conducting the audit, in advance of starting to get ready for the audit ensures that there are no surprises when the fieldwork starts.
The agenda of an audit-planning meeting should include:
- Introduction of anyone who was not actively involved in the previous audit
- Overview of what your association does and its major sources of revenue and expenses
This is the most important agenda items, especially if any member of the audit team (the person who is doing the fieldwork, his/her manager, or the partner responsible) for overseeing the fieldwork has changed
You cannot invest too much time in ensuring that every member of the audit team understands the business of your association
- Detail any changes that have taken place since the last audit, or will take place before the audit is completed
- Review of previous year’s audit from the auditor’s perspective—this is different from the auditor’s report that is part of the audited financial statements
The goal is to identify concerns, areas needing improvement, ways that information could be provided in advance of the audit, or analysis/reports that your organization could prepare to reduce the time invested by the external accountants
- Reconfirm the date the field work will begin and the date that draft audited financial statements are required
- Review of Engagement Letter prepared by your auditor and signing, if there is no need for any changes
“The engagement letter is the contract between the client and accountant. As such, it is the defining document setting out the responsibilities and obligations of each of the respective parties” 2
Do NOT allow the audit fieldwork to begin until you have received, signed, and returned the engagement letter
- Review and signing of the Management Representation letter, usually prepared by your auditor that confirms that all of the information contained provided to the auditor is true, accurate, and that all information has been disclosed
Signing of confirmation letters prepared by the auditor to your:
- Bank(s) confirming the amount in each bank account, investment account, and the details of any loans as at the yearend; if two signatures are required for cheques, then two signatures are required by some banks
- Investment dealer(s) providing the same information that your bank is asked to supply
- Lawyer confirming details of all outstanding legal matters that may impact on the fiscal year being audited or future years
After the meeting, an investment in an email reviewing the discussions may be a wise investment with details of any additional reports you have agreed to provide before the start of the fieldwork.
Our article, Save Money and Reduce Audit Stress, contains additional suggestions about preparing for your association’s audit.
The above is provided for informational purposes only. It does not constitute accounting, or other professional advice, and you may not rely on it as such.
1 For the purposes of this article, the word “audit” will be used as almost all of the work your association can control is the same for both an audit and a review engagement.
2 icas.sk.ca/uploads/File/PP_Bulletins/2008_August_Engagement_letters.pdf (retrieved December 15, 2014).