Tips to Prepare for Financial Audit
Financial audits are usually associated with a great deal of trepidation. That shouldn’t be the case though. Audits are important because they help you uncover vital information about your business and its financial position. This makes it a valuable tool for the growth and development of your business.
KGRN Accounting Associates is a UAE-based accounting firm and we help business organizations such as your own by conducting audits, managing accounts and other areas related to accounts and finances. So to help you prepare for your net financial audit, here are a couple of tips:
- Specify your plan
When you meet up with your accountant, you need to inform them about your long term plans, what you want to do and where you expect to be. This will help tem derive appropriate sources of finance and accounting.
- Maintain digital records
Digital documentation of financial records helps speed up the auditing process. It allows quick access to information and easy instant reference to older financial statements. Also, these records can be accessed from anywhere if uploaded online, allowing you to make entries from anywhere and send the information to your account at any time.
- Check out the audit team
Before handing over you financial information to an auditor you have to determine if they are as reliable as they claim. Interview potential auditors and ask to speak with the person who will be handlingyour finances. Once you are satisfied with their abilities and sure they can ensure the audit process goes smoothly, you can hire their services.
- Do things right the first time
When maintaining accounts and preparing reports, make sure they are aligned or in sync. That is the accounting timeline should match the reporting one. If you don’t, you will have to spend more resources to correct and redo it later.
- Reconcile your records every month
It is important for your business to close its books each month. This allows you to identify and record all your expenses and notice discrepancies or inconsistencies early on and prevent the damage from escalating.
- Get your fixed assets fixed
Many organizations find it difficult to track their fixed assets. To avoid this, you can make use of Software Advice to create an Excel spreadsheet and effectively take into account the services and taxes whichare considered a part of the fixed assets purchase value.
- Categorize your expenses properly
Granular tracking is common even after your audit financials have been put into broad categories such as R&D, administrative and generaland marketing and sales. But you need to bear inmind which item belongs in which category to avoid issues while allocating items in the future.
- Don’t forget to include deferred rent
According to the Generally Accepted Accounting Principles (GAAP), when it comes to accounting, the value of lease needs to be equally dispersed over the given period. Even if couple of months are rent free, you will still need to recalculate accordingly for accounting purposes.Financial audits need to be taken seriously, especially if it is your first. But with the help of KGRN Accounting Associates you will be able to prepare the right way for yourcompany’s financial audit.