Get Ahead this Audit Season
Audit season is on our doorstep. For many states, audit season falls between the 1st July through to the 30th September. For those who have moved to cloud-based software since your last audit, you may be confused as to what your auditor may be expecting to see. With cloud-based software, there are many processes you don’t perform that you may have with your server-based legacy software, such as printing reports. So without printing such reports, you might be wondering, what will my auditor want to see? Enter the 6 point cloud-based audit checklist.
To assist, we have compiled the top 6 items your auditor will be on the lookout for this audit season. Work through this checklist in the lead up to audit season so you are well and ready in advance.
Top 6 Cloud-Based Audit Items
On top of the list as your most important audit report of all is your reconciliation. This one report will show your auditor that you have reconciled the account and the closing balance mirrors the bank statement at end of month. It will also show that you have been reconciling the account within the prescribed time frame according to your State or Territory’s legislation. You will find your software has a dedicated section that stores your reconciliation reports. Be sure you know where to access them.
Cashbooks reveal all of the credit/debit entries from your bank statement and should be a mirror match. The auditor may request to see your cashbook to verify the information from the bank statements has been correctly recorded in the software. Some software programs may have slightly different names for the cashbook such as Receipts or Payments journals. It’s all the same thing so check your software’s jargon.
The trial balance shows all of the ledger accounts that make up the closing balance at the end of the period. It can be found in the same place as the reconciliation reports.
Receipts can be reprinted in PDF from a transaction search or directly from a tenant ledger. Do this by filtering down on receipt numbers or by a particular time period.
Auditors like to run a verification to demonstrate a particular batch was legitimate. You can access saved copies of particular EFT batch files or Bpay batch file lists within your software. Simply go into the withdrawals section of your software, search the history of batch file numbers in date order or by using search criteria to find a payment batch.
You may have some adjustments which have been shown in one monthly period and corrected in another. The auditor will ask for an explanation as to what occurred and to see that the errors have been fixed accordingly. You’ll find the adjustments in either the reconciliation report itself or in the unreconciled items report.
So get a step ahead of Audit Season and feel prepared when it rolls around with our 6 point checklist. There is no better feeling than being prepared when that knock comes to the door.
Jane Morgan is the Director of End of Month Angels, a consultancy firm specialising in Trust Accounting. Jane knows the legislative requirements of running a successful Real Estate office through her 22 years industry experience. Don’t trust just anyone with your trust accounting. Book an appointment with an End of Month Angel today.