The end of December is also the end of the financial year for some organisations.  As such, it is worth reviewing some key areas and preparing for the external audit.  One important issue is to establish with the auditor the timetable for the external audit as that will help you prepare the relevant reports and documents that they will need.

In addition, ask the auditor for their requirements schedule.  This schedule details what they will need from you to complete the audit.  It is really important to be clear about the requirements because it can save you time and money.  Even though you may have agreed to a fee to complete the audit they can often charge additional fees if you have not supplied the required documents as requested, or have not supplied them on time.

Other information that you should prepare at the end of the year:

• Finalise reconciliations to the end of December and make sure you understand what the balances are made up of.  For example, if the Creditors account has a balance of $2,500 make sure you know what accounts are outstanding that adds up to the balance.
• Reconcile your Petty Cash.  While this may only relate to a small amount, a lot of unauthorised amounts can add up to a significant amount.  In addition, if you have poor controls over your Petty Cash system it also indicates to the auditors that you may have poor controls over the rest of your operations.
• If you receive grants then often the end of year means that you need to submit acquittals or, if you haven’t already done so, submit applications for next year’s grants.
• Make sure you have properly reconciled GST and prepare the BAS.
• Print out a trial balance and the other financial reports and make sure the balances match the amounts in your reconciliations.

Another important issue with working to a timetable that you have agreed to with the auditors is that is also allows you to set the date for the Annual General Meeting (AGM).

We will talk more about the AGM in the next post.