Maryland Accounting

Maryland Accounting

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Make less journal entries - Audit standards require that we review journal entries for unusual activities. The more entries, the longer the audit takes. You can cut down on journal entries by recording bank charges, debits and manual checks as you would any other cash disbursement. Record bank account interest earned like you would a deposit.

Be ready for us - Make sure your auditor has provided you with a long Client Assistance List (CAL) or PBC (Provided by Client) list. The longer the better so that you can do the work at your schedule instead of scurrying during the audit fieldwork. Number the list and have a folder, notebook tab, or pile for each number. Impress the auditor, be organized, that's what we're looking for.

Be consistent and predictable - We like ordinary and boring. If you have a group of month end journal entries for depreciation, accrued payroll, etc., make them all on one entry that looks the same each month. Keep entries as ordinary and routine as possible. Record deposits the same. Record invoices the same. Make the transactions as easily identifiable as possible.

Support, Support, Support - Every transaction requires support. Checks, deposits, journal entries. Be consistent by including the same support on each type of transaction. Make sure every transaction has the required approvals.

Document your approval processes and follow them - If a disbursement requires a board signature, make sure it has a board signature. Make sure your approval processes will pass the auditor's tests.

Don't turn the audit engagement into an accounting engagement. Get the accounting work done first. Post accruals, depreciation, make sure everything ties in, etc. We don't want to do accounting work at the audit. Auditors like to tick and tie to get comfort that the numbers are right. Every time we have to make an entry, you lose credibility and it takes longer for us to get comfortable. Your auditors don't have to be your accountants, you can hire an accountant to do a monthly or quarterly review so that you'll be more prepared for your audit.

Insist on consistency from your audit team. Ask ahead of time, who will be coming. Are they the same auditors as last year? If not, push back a little bit. The more consistency, the less learning curve and the less interruptions.

Create an Audit Committee. Having an audit committee for your company is a crucial tool to preventing fraud and saving time and money with your outside auditor. The role of the audit committee will be the direct line of communication between the board of directors and the outside auditor.

Fill out your own confirmations. If you really want to save some money on your audit, assign an employee from your company to fill out and mail the audit confirmations. New auditing standards require that your auditor receive all of the responses to your confirmations prior to beginning the audit.

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