State and local government entities across Michigan are subject to audits just like the private companies in the state. While the exact nature of the audit may be different between public and private entities, the main purpose of the audits is the same – ensuring that financial information presented by an organization is reliable.
When preparing for an audit, consider the suggestions below. They’ll help the audit go more smoothly for your government entity.
Don’t be Afraid of The Auditor!
Of course, an audit is a daunting event. But there is no need to be afraid. We encourage you to communicate with the auditor prior to the audit’s official start date. Not only does this open lines of communication but typically there are standard reports and downloads that every audit requires. You can learn of those early and get them ready to share.
Ensure Financial Records are “Audit-Ready”
Another way to prepare is to review the audit report from the prior year. If there were audit recommendations, determine if those areas been addressed. Uncorrected errors can lead to the current financial statements being less reliable. Also, there may have been weaknesses noted that were not deemed significant enough to be full findings in the prior year. But if those weaknesses have not been addressed, they may have worsened to real, significant concerns.
Don’t Put Off Good Recordkeeping Until the Last Minute
One way to make an audit go smoother is to follow best practices throughout the year. For example, if there is a Michigan state policy or local regulations dictating what approvals are required for certain purchases, then ensuring that policy is followed for the year leads to fewer audit issues.
In addition, don’t put off recording transactions and preparing reports throughout the year. Scrambling to do recordkeeping inevitably leads to errors. The best practice is to do the right thing ALL year, not just as an audit approaches.
Gather an Audit Team for Your Organization
Audits are often a big undertaking, and because of that, it’s difficult for one person to handle all the requests. Gathering a team and assigning each member certain responsibilities make the audit less daunting. Keep in mind, while the audit is proceeding, the normal workday is taking place too. So, anything to spread around the daily work tasks can make the audit proceedings more manageable for your team.
Morgan & Associates is Based in Michigan
Our team is based in Michigan, and therefore, we have extensive knowledge of state and local regulations. We firmly believe that preparing for an audit doesn’t have to be a scary or lonely process. We’ve calmed the nerves and fears of leaders across our state as their audit day approached. We did so through preparation! If you’d like help with an upcoming audit, complete the form below so we can talk.