Annual audits

We just commenced our annual audit. (Our fiscal year runs July 1 through June 30. ) I personally have never had any angst around an audit so it’s interesting to see those that do, even in my organization. One person is a bit of a perfectionist so she worries about any request for which she doesn’t have an immediate response. I don’t take audits lightly but I do truly believe auditors are there to help. Auditors are there to make sure that the financials you represent in Quickbooks, Peachtree, Sage or other accounting software are accurate. Yes, they do check for fraud and misrepresentation (which is a great thing!). But the bulk of their work is ensuring consistent use of the (usually) accrual method of accounting, following GAAP standards, and ensuring adherence to processes outlined in your own internal standards. So, if you have any questions about accounting standards, your treatment of a revenue or expense source, any gray areas, just Ask! You can ask throughout the year. It’s always better to ask when you are not sure. Consistency is important and how can you be consistent if you aren’t sure how to handle something and keep flip flopping? Think of your annual audit as the tool that keeps your accounting systems running smoothly, your bankers, investors and others happy, and you aware of any potential accounting concerns looonngg before they become serious. You will be much happier and have a much easier process than if you view an annual audit as a necessary evil!

About Tiffany C. Wright - The Resourceful CEO

Tiffany C. Wright is the author of “The Funding Is Out There! Access the Cash You Need to Impact Your Business” and “Solving the Capital Equation: Financing Solutions for Small Businesses.” She is the founder of The Resourceful CEO, which helps owners of small/medium-sized businesses prepare their businesses for sale. Tiffany has an MBA from the Wharton School of Business, sits on non-profit boards and serves as a business mentor with the Cherie Blair Foundation.
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