As we embrace the final push for year-end audits and wonder could I have done more in advance or remotely? How can I make this easier next year? Well, no fear, CSMFO is here. CSMFO board member Karla Romero asked Bryan Gruber, CPA and Managing Partner with Lance, Soll & Lunghard, LLP (LSL) to share some helpful tips and new trends in the government auditing industry.

1. What can agencies do to ensure a smoother final year-end audit process?

Preparing for the year-end audit is a big task. The problem is that your normal day-to-day tasks don’t go away while you prepare, and it only happens once a year so it’s not in your normal routine. Getting prepared early is key and setting progress goals to stay on track with year-end closing and audit preparation will make a huge difference. I live by a list and with so many things to consider with year-end close and audit prep, a list is a must… it’s just too easy to forget something.

Talk to your auditor early about items that you may not have considered as well. The year-end audit really is a team effort and good communication and early communication make all the difference.

There have been some improvements this past year or so with auditor portals that encourage collaboration of documents and communication to help organize the audit and facilitate a smoother audit process. In addition, Microsoft Teams has made a huge impact on communication and collaboration. If you and your auditor are both using Teams, there are some great ways to leverage the power of Teams for a smoother audit. Lastly, prior to sending your trial balance to the auditor, do a high-level analysis of the current year to the prior year. This is a great way to spot adjustments that should be made and can also assist in quickly addressing auditor questions during the audit process.

2. What should agencies consider if they are exploring a 100% remote audit process in the future?

With COVID we have all been forced to work differently than we have in the past and for many, that meant a remote audit. For the most part, a remote audit is completely doable. Technology has evolved dramatically and allowed for something that just wasn’t possible in years past. Governments that have adopted more modern ERP systems, electronic workflows, and electronic storage of documentation have done well with remote audits. Also, providing the auditor with remote access to your system and electronic documentation can reduce your time running reports and scanning and sending sample documents.

3. While governments are wrapping up their audit, what are some things that they should be thinking about?

One big consideration this year is proper reporting of ARPA and Cares Funding. Make sure you are talking to your auditor early about how this funding applies to your government and any impact on your financial statements and single audit compliance. Also, talk to your auditor about new GASB pronouncements effective this year, such as GASB 84 (Fiduciary Activities), and the impacts on your financial statements.

4. What new trends are you seeing with audit and financial statement preparation?

I mentioned earlier that an audit is a team effort and working well with the auditor is so important. Some governments have found benefits in using the auditor’s software in-house to prepare for an audit, mirror financial statement organization, and leverage reporting and analysis capabilities. The software can be used to assist with period and year-end closing, perform analysis of trial balance and financial statements, organize documents and support, and prepare financial statements and other reports. There is potentially great efficiency that can be gained through this collaboration between auditor and client in addition to other benefits to the government agency.

CSMFO thanks LSL for their ongoing support and commitment to our membership. LSL is a diamond sponsor for the 2022 CSMFO conference and is looking forward to seeing you in February.