Audit Preparation
One of my more unique services is my “audit prep” services. In its simplest form I prepare the audit workpapers (see below) to be delivered to the auditors. I am engaged and paid by the client being audited keeping the CPA firm independent. This service can have many variations. This usually starts with organizations that have particular accounting or staffing issues and the work is not "as clean" as desired. In other cases, I may only assist in a particular area where the client’s resources are not sufficient, such as preparing stock options schedules or calculations (SFAS 123 R), accounting for income taxes (deferred income taxes) (SFAS 109), depreciation, lease accounting and so on.
These services are beyond your typically outsourcing assignment. In some cases, you may use typical outsourcing services, however, there times when you need a higher level of expertise, backed by years of experience, the ability to work quickly, and to fully understand the objectives behind the work. I bring these and many other attributes to the assignment as well as the ability to indentify issues and amount of work required under the circumstances. Of course, I am working closely with the client and the auditors during this entire process.
Of particular interest are nonprofit organizations, including private foundations and churches. Many of these organizations do not have the ongoing expertise to prepare for an audit. Many times the audit requirement is new, creating additional issues. While the organization is usually very familiar with the day-to-day issues, they are not familiar with the actual financial reporting and disclosures. Many times accounting policies and procedures need to be enhanced and perhaps in-depth accounting assistance is needed.
$25 M Venture capital based technology company with operations in three countries. Clean-up and preparation of audit workpapers including consolidation.
$36 M sales, manufacturing company with multiple locations. Minor clean-up, preparation of audit workpapers, working directly with auditors, revision of procedures where appropriate.
Private foundation subject to California's Nonprofit Integrity Act requiring GAAP audits. Annual accounting, date of death and transfer valuation, preparation of audit workpapers, working directly with auditors, preparation of tax return (major GAAP / Tax differences).
Church with a first time audit need. Issues of GAAP conversion and revenue recognition.
Midsized manufacturing company with limited staff with sales to both wholesale and retail customers resulting in several revenue recognition issues.
These are the schedules provided to the auditors to support general ledger accounts or groups of accounts. Properly prepared workpapers saves the auditors time, reduces fees and gives them a higher degree of satisfaction.
Are this workpapers actual paper workpapers or electronic workpapers and files? This depends solely on the what the CPA firm requires. In today's audit and accounting environment most all the work is done in Excel. Where appropriate, supporting documentation is scanned as PDF files and linked to the related balance. While the CPA firm takes the lead with this, my 20 years of doing this type of work and extensive knowledge and use of Excel makes this a powerful audit/audit prep team.
Because of the nature of audit prep work and the needs of both the CPA firm and the client, the electronic workpaper are prepared "print ready", meaning the pages are formatted to properly print. At the request of the CPA and/or the client, dual sets of workpapers are created, electronically and printed.
