Case Study
Significant audit fees incurred. A biotechnology company engaged an audit firm to perform its first financial statement audit, which they intended to provide to potential investors. Once the audit was underway, management realized they were not prepared for the process, leading to additional fees and significant delays. The process was initially estimated to only last one month, and after five months in, they realized they needed help.
Our team at Signature Analytics quickly dove into action, preparing appropriate accounting work papers for the client. Initial audit request lists often include 100+ items, and gathering supporting documentation for all balance sheet and income statement accounts can be a time-consuming task, especially for management teams unfamiliar with the process or unsure about the accuracy of the data.
Many of our accountants have previously been auditors themselves, so we knew exactly what schedules and support the auditors were looking for. Our expertise enabled us to efficiently handle inquiries and follow-up questions that arose during the audit process, saving the client time and effort.
By stepping in to correct the company’s financial statement accounts and preparing schedules, we were able to bring the audit to a close and mitigate the additional overrun fees that would have continued to incur. Had we been engaged before the audit process had begun, we could have fully prepared the client for the process, eliminating up to $30,000 in unnecessary audit overrun fees.
While this may not be your average success story, it serves as a valuable lesson for companies planning to undergo similar processes. You don’t have to do it alone. Having a trusted financial partner by your side can ultimately save you money through more efficient processes and reporting, ensuring a smoother audit experience for your business.
Minimizing audit overrun fees is essential for maintaining your business’s financial health and ensuring a smoother audit experience. At Signature Analytics, we’ve identified several best practices to help you reduce audit overrun fees and navigate the audit process more efficiently.
1. Organize Financial and Business Records Before the Audit
Preparing your financial and business records before the start of the audit is crucial. By organizing your records, you can streamline the audit process and minimize the time and effort required to complete it, which in turn reduces overrun fees.
2. Consider Outsourced Assistance for Accounting
If your company lacks an experienced accounting department, consider hiring outsourced assistance to ensure that the audit process is organized and performed in a timely manner. A professional outsourced accounting team can provide valuable guidance and support, helping you avoid costly mistakes and delays.
3. Commit Management and Staff to the Audit Process
Ensure that your management team and internal staff are fully committed to the audit process and understand what is expected of them. When everyone is aligned and aware of their responsibilities, the audit process can proceed more smoothly and efficiently.
4. Identify Areas Where Assistance May Be Needed
Proactively identify areas where your company may need additional support, especially relating to complex U.S. GAAP accounting guidance. By addressing these potential challenges early on, you can avoid delays and ensure that the audit process remains on track.
At Signature Analytics, our team of experts is here to support you in minimizing audit overrun fees and navigating the audit process with ease. Contact us today to learn more about our tailored financial solutions and how we can help your business achieve its goals.
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