Undergoing an audit, or any type of engagement, is a cumbersome process. From the auditee’s standpoint, it is a necessary evil, a seemingly tedious task that can take away time, resources, and attention from other aspects of the business. As a public accounting firm, a substantial portion of our business arises from providing audit services to our clients. Therefore, it is, and has always been, in our best interest to try and make the overall process as painless as possible for the auditee. I have come up with five steps, that both auditors’ and auditees’ can consider in their efforts to make the audit process as seamless as possible (and none of them have anything to do with “accounting”).
1. Pre-Engagement Communications
In a perfect world, auditor-client communication would occur year-round. However, because of other factors, this is not always achievable. Pre-engagement communications are some of the most important discussions during the process and set the tone for the audit. During the discussion’s auditees’ can decide on and communicate how they would like the audit to be conducted (remotely or in-person; type of non-attest service desired; point of contact and who will provide access to the files; prefer contact by email or phone; etc.). Additionally, these discussions will also provide time for auditors’ to gather meaningful information about the auditee (changes in management or governance; changes in business operations; how COVID-19 affected the client’s business/operations; how the client would like the engagement to be conducted; etc.). Pre-engagement communications are imperative in performing an efficient audit; in addition to those items mentioned above it also allows for the auditor and auditee to discuss and establish deadlines.
2. Meet and Establish Deadlines
Deadlines are the root of the stress felt by everyone involved in an audit engagement. While the stress cannot be completely eliminated, it can certainly be mitigated by establishing deadlines prior to commencing the audit. While a deadline for the final audit report is most common; auditors and auditees should understand that deadlines should be set for activities between initial pre-engagement discussions all the way through the report date. Some ideas for deadlines include; setting a deadline for the auditor to provide the Requested Items List, a deadline for the client to provide each of the items from the Requested Items List; a deadline for the drafted audit report; etc. Setting such deadlines will not only provide transparency in the process but also keep both the auditor and auditee accountable for their end of the audit process.
3. Access and Availability
Access and availability is pretty self-explanatory. Prior to the audit process, auditees’ should consider how they are going to give auditors access to information and who will act as the point of contact. From the access side; it is worth mentioning that providing more/better access for auditors allows them to work through more facets of the audit on their own. Conversely, if limited access is provided, auditees’ can expect continual follow up inquiries, requests, and demands. With that being said, the auditee’s participation in an audit will never be completely eliminated, which is why client availability is so necessary. Client availability, whether in-person or remotely, allows for quick responses and keeps the audit running smoothly. From an auditor standpoint, availability allows for clients to more easily check the status of the audit or make various inquiries.
4. Maintain Open Lines of Communication Through the Report Date
To maintain maximum audit efficiency, it is vital that lines of communication don’t stop or curtail after fieldwork, they need to continue, at minimum, through the audit report date. Auditees’ should understand that after fieldwork; auditors’ work can sometimes go through four rounds of reviews and it is more than likely that there will be follow up inquiries for the client; responses to which are necessary for preparation of the audit report. From the auditor’s standpoint, the period after fieldwork can be unnerving for the auditee if there is a lack of communication regarding overall audit status; confirming that deadlines will be met; or describing where the audit is in the review process.
5. Ask Questions
This step is more directed toward the auditee. Once the audit report has been signed, sealed, and delivered; that engagement is concluded. However, the working relationship between the auditor and auditee is not. Contrary to popular belief, auditor’s generally do derive a sense of value in their efforts to deliver an opinion on a PDF or packet of paper to a client. Rather, we find value in helping our clients; so please, feel free to ask questions. Questions can range from asking for internal control recommendations to asking us to provide more information on an upcoming accounting standard or even just asking how to account for a specific transaction. Not only does this allow for auditor’s to help assist their clients but also provides information about subsequent annual audits.
An audit can be difficult for anyone involved but we believe the five steps above, if properly addressed and utilized, will lead to a much more efficient and less painful audits for both parties of the engagement. The five steps above can be implemented by auditees’ of all sizes and resources and aren’t even necessarily “accounting” related. At the end of the day, the five steps above are all about creating, cultivating and maintaining a strong relationship between the auditor and auditee as, ultimately, that relationship can and will drive the audit.
Virginia’s New Electronic Payment Requirement for Some Individual Income Taxpayers
Following an amendment to legislation approved by the Virginia General Assembly, some taxpayers may now be affected by a new requirement for certain tax payments.
Effective for taxable years beginning on or after Jan. 1, 2021, taxpayers who make estimated tax payments must submit all of their income tax payments electronically if:
- Any estimated tax payment exceeds $2,500; or
- Any extension payment exceeds $2,500; or
- The total estimated income tax due in any taxable year exceeds $10,000.Taxpayers should refer to the estimated income tax instructions for details about how to compute the total estimated tax due.
This applies to all payments made on or after July 1, 2021, and includes all payments for estimated taxes, extension payments and any other amounts due when a taxpayer files a return.Visit the Virginia Tax website for more information on individual income tax payment options.
If you need assistance with making your Virginia payment electronically, please contact a Rubino professional today.