How To Prepare For The Audit Of A Special District That Succeeds
The audit process sometimes fails when it comes to some special districts in California. It’s a misconception that’s common that auditors are only out to ‘get’ their customers by getting their flaws exposed. Ideally, an auditor should be seen as a resource and not some adversary. A yearly audit is a matchless tool for ensuring that all financial procedures and systems are in order. With proper preparation and open communication, districts can successfully and seamlessly go through a financial audit. This article offers the major components of successful audit for districts.
- Choose the correct auditor
When hiring an auditor, be sure to seek one that;
- Features an excellent reputation and is capable of offering concrete references and review history.
- Adds great value to your organization by offering insights regarding emerging issues and the best practices.
- Has experience regarding the rules and regulations governing districts in California.
- Has a license to undertake Yellow Book Audits in the state of California.
- Ask the right questions
The auditor should serve as a resource of insights into what unusual accounting transactions can cause. If you call him before the audit, he should be capable of directing you to the right accounting treatment at the first time, instead of proposing journal entries to right mistakes during the process of the audit. Since residents of your community can ask questions like ‘what is a special district’ if they don’t know what’s going on, your auditor should be the resource that answers all the questions you might also have.
- Organize audit documentation
Districts can actually minimize omissions and errors by becoming proactive in creating audit documentation. Demand for a Prepared by Client (PBC) list quite early so your accounting staff have ample time for preparation. Review the list and ask the auditor for templates or examples for any requests that might be unclear. Ensure that your accounting records are neat. Auditors always presume that anywhere there is smoke, there is always a fire. The more disorganized the accounting records happen to be, the deeper your auditor will certainly dig to discover errors. If any unusual transaction has taken place, retain all documentation that might be related to the decision-making process to prevent extra time being spent on searching for underlying records.
- Internal communication
Lack of efficient communication between varying departments can actually slow the audit process down significantly. For instance, some payroll documentation that has been requested might come from the HR department while some will be from the payroll department. Several organizations retain their receiving documents and P.O.’s quite separate from their paid invoices. It is truly advantageous that you should bring all of those that participated in any transaction cycles into the loop so as to ensure that the documentation that’s provided to your auditor is complete.
Even though professional auditors must remain objective and independent, complex accounting standards together with rising industry regulations have increased the need to have them involved as trusted and reliable advisors to special districts in California. So, ensure an open and sincere communication channel with your auditor, use these tips, and your audit will surely be successful.
