Challenge: A biotechnology company engaged an audit firm to perform their 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 and it was leading to additional fees and significant delays. Five months into the process which was initially estimated to only last one month, the company realized they needed help.
Signature Analytics’ Solution:
Prepared appropriate accounting workpapers. Audit request lists often include 100+ items. Putting together this supporting documentation for all balance sheet and income statement accounts is easily one of the most time consuming aspects of the financial statement audit – especially for a management team that is not familiar with the process. Many of our accountants have previously been auditors themselves, so we knew what schedules and support the auditors were looking for and prepared everything for them.
Handled inquiries and follow-up questions during the audit process. We also acted as the main point of contact for the auditor during the remainder of the process so their management team could get back to focusing on their day-to-day responsibilities.
ROI: Could Have Eliminated $30,000 in Unnecessary Audit Overrun Fees
By stepping in and correcting the company’s financial statement accounts and preparing schedules, we were able to bring the audit to a close and mitigate any additional overrun fees that would have continued to incur. Had we been engaged prior to the start of the audit, we would have fully prepared the company for the process, potentially eliminating up to $30,000 in unnecessary audit overrun fees.
Best Practices for Minimizing Audit Overrun Fees
- Get your financial and business records in order prior to the start of the audit.
- If you do not have an experienced accounting department, consider hiring outsourced assistance to ensure the process is organized and performed in a timely manner.
- Ensure management and internal staff are fully committed to the audit process and understand the expectations.
- Identify areas where assistance may be needed especially relating to complex U.S. GAAP accounting guidance to avoid delays.