With 30 years of working with non‑profits, we’ve seen what makes an audit run smoothly— and what can cause challenges.
Although we don’t perform the role of auditors, we often support organisations in preparing for organisational general‑purpose audits. Below are 8 practical tips that we’d like to share. These tips also apply to independent reviews (which we do perform). These tips will help managers, finance teams and boards reduce delays, better manage audit fees, and avoid common audit pain points.
1. Prepare for the audit throughout the year
We often hear this from experienced finance managers and accountants. The key is to maintain up‑to‑date, fully reviewed accounting records throughout the financial year—not just at year‑end. Supporting documentation should be systematically stored for every transaction, which avoids a last‑minute scramble when auditors request samples.
2. Reconcile and review all balances at year end
Even with good ongoing processes, year‑end checks remain essential. Ensure that all balances are reconciled or properly analysed, including confirming that opening balances agree with the prior year’s audited closing balances.
3. Hold a kick off meeting with your auditors
A kick‑off meeting is critical for an efficient and effective audit. This gives both management (which should include the most senior manager), external accountants, the finance team and auditors an opportunity to:
- Discuss changes in the organisation and its operations
- Identify emerging risks
- Confirm timelines and key deliverables
- Introduce key staff and clarify roles and responsibilities
- Discuss any management estimates or judgements that impact the financial statements
- Request a detailed audit document list (see 4. below).
- Discuss the applicability of generic questionnaires, as these are often required by auditors but do not apply to all organisations.
4. Request a detailed audit document list
Rather than assuming that you have everything covered, ask your auditors for a clear schedule of required documents. This helps with planning, workload management, and reducing interruptions during the audit, all of which could mean a lower audit fee. We once saw an audit where the auditor assumed that the organisation would produce a whole set of working papers without being asked for them and was awaiting these, with the organisation believing for more than a month that the auditor was auditing. A kick-off meeting would also have been really useful in this situation.
5. Process and support all year end entries
Ensure that all year‑end adjustments—such as leave pay provisions and accruals—are processed before the audit starts. Calculations should be clearly documented and supported to avoid delays or unnecessary follow‑up.
6. Take ownership of the annual financial statements
There should be a clear plan for preparing the annual financial statements before the audit begins, with management taking responsibility for their preparation. To avoid self‑review risk, auditors should not prepare the financial statements themselves.
Remember, annual financial statements are also a communication and marketing tool for current and potential donors. Try to ensure that they accurately reflect the mission and work of the organisation, avoiding unnecessary for‑profit terminology.
7. Communicate clearly during the audit
Open communication with auditors supports an efficient audit process. If misunderstandings arise, consider meeting with the audit team to clarify issues or request involvement from a more senior team member if appropriate. For longer audits, consider meeting with the audit team or a senior member of the team on a weekly basis.
8. Auditors don’t always know what’s best for your organisation
If you don’t understand an audit request—such as a proposed adjusting journal entry—don’t accept it without question. Auditors can make mistakes or incorrect assumptions, and adjustments should always be supported by proper analysis and documentation, not simply justified because they were requested. Many years ago, we encountered a general ledger filled with journal entries described as “audit adjustments” without any supporting documentation. It was very difficult to untangle and had a lasting impact on subsequent years. Simply labelling something as ‘audit’ is not sufficient justification.
How we can help:
- Audit readiness planning
- Financial statement preparation support
- Independent reviews
- Monthly accounting and reporting
Please email us at ziyo@ziyo.co.za if you need assistance.