Audit Preparation

I can help you prepare for an audit which should save costs or at least avoid additional costs of the audit. This is whether the audit is the annual audit or a specific project audit.

Ideally, the audit preparation should be built into the accounting system and processes. Wave and most cloud-based accounting platforms have provisions for attaching copies of receipts and other documentation to transactions which can be used by the auditor to vouch for the transaction.

These platforms also include the ability to share access with the auditor.

Another important step in the process when dealing with expenditure is to refer back to the documentation authoring the transaction. This should be done when the expenditure is ordered or incurred and not when the expenditure is paid. The authorising documentation may be the minutes of a committee meeting or the name of the memo of the person who has the delegated authority to incur the expenditure.

Copies of documentation can be sorted and shared with the auditor online using tools such as Google Drive or Dropbox with specific folders and sub-folders being exclusively shared with the auditor. Preferably there is a separate folder for each year that is being audited.

I can help you put together a panel of auditors from which your committee can then choose an auditor who will be nominated as an auditor at the next annual general meeting. This panel should preferably consist of auditors who are familiar with the requirements of not for profit organisations, especially where government grants are involved.

Suggested audit preperation checklist

  • Constitution and certificates of registration
  • Bank statements and cancelled cheques (if you are still using cheques);
  • Term deposit and other investment statements. Minutes authorising investments or reference to investment strategy should be included;
  • Staements for the period fom payment processes such as Stripe, PayPal and Square;
  • Invoices and bills (attached to transations in accounting system)
  • Manual receipts issued;
  • Set up auditor access to accouonting plaform and online folders set up for audit, and also the payroll system if sepedrate from accounting plaform;
  • Business Activity Statements and FBT returns;
  • Policies related to financial management and controls;
  • Board or committee meeting minutes
  • Memos regarding delgations;
  • Grant proposals, commitment letters and contracts with funding sources;
  • Final reports submitted to funders;
  • Contracts with vendors;
  • Aproved budget and any updated forecasts.
  • Leases
  • Equipment maintenance agreements
  • Insurance policies (office contents, professional liability, etc.)
  • Ensure all bank accounts reconciled;
  • Depreciation schedules
  • Identify doubtful debts and those debts that should be wriyyen off. Committee minute regarding debt write offs;
  • Schedules of prepaid expenses for upcoming fiscal year
  • List of fixed asset additions and dispositions