Top Ten Tips for Making the Audit Run Smoother
Credit Union Advisor, 2006 Fall

Credit unions work not only with regulators and internal auditors, but also with their external financial statement auditors. The success of the external audit is in large part due to preparation prior to the auditors arriving. Therefore, anything that can be done to make the year-end audit run as smoothly as possible (and, not to mention, get the auditors out of your hair earlier!) will benefit everyone involved. To assist with your preparation, we offer the following tips to make your audit run smoother:

1. Request a client assistance list and prepare the items on the list before the audit begins. (This is crucial to the timing of fieldwork and efficient and effective completion of the audit).
2. Discuss major financial decisions with your auditor before taking the plunge. (Your auditor will be happy to assist you in determining if financial decisions are appropriate, the accounting is appropriate, and possibly even offer advice. This will also save time during the audit, as they will already be familiar with the situation).
3. Schedule interim visits. Auditors can generally complete numerous procedures before year end, when both your schedules are much less hectic than at year end. Potential problems can also be addressed at that time to avoid adjustments after year end.
4. Discuss with your auditors the preferred method of workpaper exchange. Whether this is via e-mail, courier service, secured websites, or physical exchange, knowing ahead of time what is expected will allow for a smooth audit. Many workpapers may be able to be completed in advance and turned over before the audit begins.
5. Have responses to the regulatory examiners and internal audit findings ready for audit review.
6. Assist auditors with the confirmation procedures. (The fewer non-returned confirmations that auditors get back, the less additional testing that will need to be performed at year-end).
7. Keep a “tickler” list of time-sensitive reports that must be requested for the audit (for example, member balance downloads for loans and shares as of testing date).
8. Make sure that credit union personnel involved in the audit are available during fieldwork as much as possible. Schedule time to meet with the auditors on a daily basis for progress checks.
9. Set up online access to all cash and investment accounts. This is often used during the audit for confirmation of balances and is more efficient than the traditional confirmation process.
10. For state-chartered credit unions, realize the implications of the new IRS Form 990 process and have expenditures properly allocated to UBI functions. This will expedite the Form IRS 990 preparation process, whether done externally or by the credit union.

BONUS TIP: Have plenty of coffee available. As exciting and naturally stimulating as your audit might be for all involved, don’t forgo this important resource.