Many companies cringe at the prospect of an on-site audit, which can make your job as an auditor more difficult. Chasing hard-to-follow paper trails and attempting to make sense of the inner workings of an organization also pose challenges. Staying true to standard accounting principles will help you conduct a good technical audit. In addition, remember the following three tips to help you with on-site audits: prepare in advance, avoid assumptions and be polite.
Prepare in Advance
A successful on-site audit begins well in advance of your arrival in the field. Prepare yourself regarding the company you will be auditing. Take the time to learn about the organization you are auditing through a pre-audit review that will provide a better understanding of the potential pitfalls to look out for. Read prior audits. Request copies of company procedures and internal reports so you have at least a rudimentary understanding of how the company works or at least how it claims to work. Prepare an on-site audit schedule in coordination with the firm you are auditing. Prepare the scope of your audit and identify the various books, documents and records that you will require. Share the lists with the firm being audited so all of the necessary information will be available for your visit. Arrange logistics in advance. Let the company know you will require a private space with Internet access. Also remind the company to make staff aware of your visit and to ensure the staff fully cooperates during the on-site audit.
Every company has its own methods of doing business, and the practice probably will not correspond entirely with documented procedures. Remember to avoid assumptions, ask clarifying questions and address the firm being audited without judgement or criticism. Your job as auditor during the on-site audit is to gather enough data necessary to verify the validity of the figures. Assumptions about the business or expectations about what you will find cloud your ability to objectively analyze the numbers and the processes. Also, you are likely to encounter demographic shifts in the management of more businesses as previously marginalized minority groups increasingly enter the business world. Adjust your cultural expectations and attitudes accordingly.
Be cognizant of the tension your presence might cause. Staff and their work products are under scrutiny, and this close examination tends to inspire defensive reactions. Treat the people you encounter at all levels of the organization with politeness and respect. Attempt to keep emotions separate from the task at hand. Research shows emotions and subjective opinions about personnel interfere with on-site audits, and your mood can increase the number of judgement errors you make. Strive for neutrality in your interactions. Remember that just as you are there to complete a job, so are the staff you are interacting with.
A solid foundation of knowledge related to accounting principles and industry regulations are not enough to produce a good audit. With adequate preparation, a clear and objective perspective, and a respectful manner, you will not only make the on-site audit a less onerous process, you are likely to achieve more accurate and effective results.
(Photo courtesy of Stuart Miles / freedigitalphotos.net)