Given the deadlines, most Trusts will now have hopefully completed their year end audit process and submitted the annual accounts return. Many business managers will have breathed a sigh of relief that the process is completed for another year before moving on to more challenges. It may be some months before the next year end audit, but we thought it a good time to reflect on the process and what makes it run as smoothly as possible. Whilst a smooth audit makes everyone’s like easier it is also important because it normally has an impact on audit fees over a period of time.
So, from an auditors’ perspective, what makes an audit run smoothly? Put simply the easiest audits are the ones where we agree a timetable and both parties – the Trust and the audit firm stick to that timetable. A well planned audit makes a huge difference, so it is important to start thinking about this as early as possible. An audit firm will generally assign staff to a particular client for a period of time with the expectation that all of the information required to complete the work will be available in that period. Problems start to arise if this is not the case because after this the staff member may be assigned to another client or otherwise unavailable. This then leads to delays and inefficiencies. With a number of our clients, we open the document portal almost as soon as the prior year is signed off so information for the following year can be collated at an early stage. It is also important that “all” the information is available. For example, where we prepare the financial statements, many Trusts will not supply the Trustees’ Report until quite late in the process. It may seem fairly simple to incorporate this into the final accounts document but unfortunately this is often not the case, and the various reviews and quality checks can’t happen until the document is complete.
The process also benefits from a Trust that is able to provide final numbers at the start of the audit process that then do not change. This includes things like reserves and school balances which, if there are late changes, can again take significant time to change in the final financial statement document. Therefore, if a Trust believes they may need help with these, or changes will occur then that is a conversation that should happen as early as possible.
Both parties will want the process to run as smoothly as possible and provided the underlying accounting records are good, this will come from planning and communication. So do have a bit of time off from thinking about the year end but start the process of planning for next year as soon as possible.
