July 18, 2024

Image result for How to Prepare For An External Audit

There are many reasons a business could be facing an external audit, but regardless of the specifics, it’s a highly stressful situation, particularly if it’s a new scenario for the organization.

It’s important to be prepared if you want to have a positive outcome, but how can you do that?

The following are some tips to prepare for an external audit of any kind.

Always Be Ready

So, you’re looking for tips on preparing for an audit, but in reality, the best thing you can do is stay prepared.

That sounds like a tall order, but with the availability of compliance software and technology like Reciprocity Labs, it’s not.

If you’re proactively prepared, it’s not going to be nearly as overwhelming or daunting when an audit does come around.

If you have the proper documentation, records, and controls in place from the start, you’re already almost as prepared as you need to be. If you haven’t done that yet and you have an upcoming audit, it’s okay, just get things in order for the next time.

Know the Standard

You need to know the standard thoroughly you’re being audited against, and so do all the key stakeholders in your business.

You should be up to speed so that you’re not doing things that aren’t necessary for the particular standard you’re being audited on, and so that things go as efficiently as possible.

Get Together With Subject Matter Experts

No matter the standard of the audit, you should make sure that you identify the subject matter experts within your organization and start working with them to ensure that they know what’s coming. They can help the entire organization better prepare.

As you prepare for an audit, there needs to be clear communication and transparency.

In some cases, particularly with something that’s highly complex, you may require outside auditing and accounting assistance. If this is a process entirely new to your organization, this can be especially helpful.

If you do work with an audit firm, you should regularly be in contact with them even before an audit, and if new things come up throughout the year such as big financial decisions, be proactive in working with them to see how these decisions could change things in the face of an audit.

Keep in mind, if you’re working with an outside audit firm and you’re trying to rush around at the end to get things completed, it’s going to be more expensive in terms of their fees than if you stay on top of everything on a consistent basis.

Have a Point Person Responsible for Staying Up-To-Date on New Standards

Finally, sometimes a business and its personnel can be so involved in the day-to-day operations that they don’t necessarily put enough focus on keeping up with changing standards, but this can impact an audit very significantly.

Depending on the size of the business there should be a point person or a team of people whose responsibility it is to make sure everyone is ahead of any changes in regulations or standards. If changes do occur, this team should also head up any training efforts that could be required for employees.