So, it’s that time again and you have an audit coming up…?
We’ve spoken with our audit team to get some insight into how to make the process run smoothly and to turn audit time into your favourite time of year!
With no further ado, let's get ready to AUDIT!
Talk
to your auditor to start the planning process for your audit.
During this meeting, your auditor will work with you to:
Your auditor will lock in critical audit dates including site visits, stocktakes, reporting deadlines, signing dates, Board meetings, AGM
and so on.
Review
your previous audit findings and recommendations.
Have you addressed all the matters raised in your previous audit management letter?
Ensure your finance team are on top of any changes to accounting standards and reporting requirements.
The Australian Accounting Standards have had some major changes over the last three years. These new accounting standards need to be reflected in your financial statements or this can create issues during the audit and potentially result in misleading financial information being used for management decision-making.
Consider the impact of COVID-19 on your business.
Given the current climate with COVID-19, you’ll need to consider the impact the pandemic has, or is likely to have, on your business and whether you will be able to continue operations moving forward.
If COVID-19 has had an impact on your business, we recommend you revise your projected cash flows and financial statements. Include
analysis of various scenarios, including the ‘worst case’, and outline the assumptions you’ve made in these scenarios. This will help you
assess whether your business will be able to continue, or whether alternate options may need to be considered.
Upload all your relevant documentation to our client portal.
Ashfords will send you a link to our secure client portal that enables you to send us all required information in a much safer way than
via email or face-to-face (given current social distancing recommendations). You simply drag and drop the selected document into the
relevant section of the audit program, resulting in a quick and easy transfer of information.
Once we receive this information from you, we can complete our risk assessment, determine the best way to approach your audit and provide
you with a sample of transactions we wish to test.
Speak with your bank to obtain a “letter of comfort” if you know or suspect that your business has breached any debt
covenants* during the year. This letter needs to state that the bank is aware of any actual or suspected breach and that they do not
expect the debt to be repaid earlier than as per your finance facility agreement.
This letter must be
received from the bank prior to your financial reporting date.
*Most
finance arrangements have debt covenants (e.g. financial ratios such EBITDA or Interest Coverage) that must be met otherwise the bank can
demand that the debt be repaid in full. If a covenant has been breached, the debt can be classified as a current liability unless you have a
“letter of comfort” from your bank.
Call the Ashfords Audit and Assurance Team on (03) 9551 2822 to discuss how we can help make your next audit run smoothly and efficiently and make audit time your favourite time of year!
