Audit: a necessary evil?

“Audit” a word that sends shivers down many a finance professional’s back. For some, it’s a necessary evil. For others, an arduous slog that you just need to get through. Far too few, in our opinion, embrace it positively.

If you’re facing your first audit, let us reassure you that these cliches don’t need to be your experience of the audit process. Indeed, you may even come to consider it positively.

All too often, audit is seen as a once-a-year occurrence. But it is this once-yearly approach to the audit process that creates so many of the negative connotations.

Instead, removing audit from a position of self-imposed isolation and instead integrating it into your monthly financial activity not only makes the whole process so much more manageable, but it also removes the onerous negativity that it so often suffers from.

Of course, as a team of auditors you may consider it a given that we’d say this, but we happen to really believe it and would point to the following key areas as ones that you may wish to mull over to improve your audit experience.

It’s ‘just’ another month-end” – by committing to keeping on top of all your reconciliations, tracking of restricted funding, and other key accounting elements each and every month, then when the audit itself comes around, it’ll simply be ‘another’ month without becoming a burdensome task.

We’re friendly, honestly” – rather than viewing your auditors as the grim reapers who turn up once a year, why not instead commit to developing an ongoing relationship with them where conversations take place throughout the year? Send over that new funding agreement to decide the correct accounting treatment or ask about how to deal with a new type of activity when those questions arise, rather than waiting until the audit itself.

A problem shared, is a problem halved” – with a genuine connection formed between yourself and the auditor, it becomes so much easier to raise any issues, or potential issues, as they arise and deal with them accordingly before they escalate into something more problematic. We’re not seeking to pull you up on things, but instead to help and support you organisationally.

Make time for your audit” – regardless of the time you invest in preparing (or not!) for your audit throughout the year, make sure you’re also realistic about the timetable for the auditing process itself and always allow yourself more time than you initially think is necessary.

Reframe how your team – your whole team – views audit” – not everyone in the finance team will necessarily be asked to contribute directly to the audit when the auditors are in situ. That doesn’t mean, though, that the whole team can’t be familiar with what is happening and what to expect when they have reached that level of involvement and responsibility. We celebrate the finance managers that put their junior team members forward to attend our audit training sessions. This not only provides the bigger picture to those starting off in their finance careers, but also demystifies what audit really is.

Beyond the finance team, however, there is also a need to ensure that fundraising staff, programme managers and the like understand and appreciate both the audit process and its value to the wider organisation.

As a matter of financial compliance, there’s no avoiding your audit. It’s going to happen, regardless of how you feel about it. Why not then shift your attitude towards audit and reap the benefits accordingly? On the one hand, there’s the advice and guidance that you can gain from your auditors who will view your financial statements from an entirely unbiased standpoint. On the other hand, the audit provides you with the opportunity to celebrate your organisations’ successes. We happen to believe that makes it far more than simply a necessary evil!

Written by:

Farrah Kitabi

Audit Director

Ellie Lockey

Qualified Senior