Often a lot of organisations see an audit as a bit of an inconvenience and just hope that they get an unqualified audit report.  While that is fine there is a lot more that you should get out of the audit process, especially when you consider the time and cost that is involved.

What are your objectives?

It is possible that the objectives of the management of the organisation may be significantly different from what the committee of management require or want.  As such, one of the first and most important functions is for the committee of management to be specific about the objectives of the audit.  These objectives should then be confirmed and agreed to by the auditor and that they will form part of the audit.

What might an audit cover?

While an auditor has mandatory elements they must address, the audit can focus on other issues.

For example, the committee of management may identify that they require a more detailed examination of payroll issues, fundraising processes, internal controls, petty cash, fraud concerns, risk management or credit card usage just to name a few areas that could be focussed on.

All these issues may not be covered in the one audit but ninstead may form an audit plan so they are addressed over a couple of years as well as being included in any interim audits.  Of course, if there are any major concerns do not wait for the end of year or interim audit as the auditors should be called in earlier if required.

What it means for a volunteer treasurer.

As a volunteer treasurer these points highlight the importance of building an effective audit plan and relationship with your auditor.

At the end of the audit process the committee of management should meet with the auditor, without management being present, to discuss the audit and whether any issues need to be addressed.

Once the audit has been finalised then the treasurer or finance subcommittee should assess the performance of the auditor that is then discussed at a committee of management meeting.  If there is a need to appoint a new auditor the final decision must also made by the committee of management and not the management of the organisation.

There are some significant benefits to be derived from a strong and effective audit and these are discussed in the next post.