Many calendar-year entities are currently preparing for the start of audit fieldwork. One proactive way to facilitate your financial statement audit is to foster collaboration between your internal audit department and external auditors using the following four tips.
1. Reach out regularly
By scheduling meetings between internal and external audit team members, you can set the stage for a more efficient audit process. You might discuss emerging issues, such as how the organization intends to apply a new accounting standard or the status of internal control remediation efforts.
In preparation for an audit, auditors can meet to compare the internal audit department’s workplan to the external auditor’s audit plan. This comparison can help reduce duplication of effort and identify areas where the teams might work together — or at least complement each other’s efforts, without compromising either team’s independence or objectivity.
2. Provide access to internal audit reports
The external audit team can’t rely exclusively on the internal audit department’s reports for their audit. But sharing in-house findings provides the external auditors with a bird’s-eye view of the organization’s operations, including high-risk areas that deserve special attention.
Designate an individual on your internal audit team to act as a liaison with external auditors. They should be charged with sharing reports in a timely manner. This gives external auditors adequate time to review in-house reports and avoids hasty decision making.
3. Help external auditors navigate the organization
During fieldwork, external auditors need access to employees, executives, and data dispersed throughout the enterprise. Internal auditors can share key documents compiled during their audit procedures. Examples include:
- The company’s organization charts
- Copies of audit reports from previous years
- A schedule of unresolved internal control deficiencies
This information helps educate external auditors and identifies employees to interview during audit inquiries.
4. Conduct joint training sessions
Both internal and external audit teams require continuing professional education (CPE) to maintain their licenses and improve their understanding of issues they might encounter during an audit. For example, training sessions might explain new accounting standards, emerging fraud scams, and technology-driven auditing methods.
Joint training sessions help auditors share best practices and forge lasting bonds with members of the other audit team. Plus, it might be more cost-effective for internal and external auditors to share fixed CPE costs.
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Audit season is just the starting point for building this partnership. Let’s brainstorm additional ways for your internal audit department and our external auditors to collaborate throughout the year. Working together helps both teams improve efficiency and increases the likelihood of producing timely, accurate financial statements.