Accounting Services for Seattle Businesses: Experts to Help You Be Audit-Ready

June 27, 2023
Be Prepared for Audits: Accounting Services by Seattle's Business Experts

As an accounting firm in Seattle, Chief Financial Partners understands the importance of being audit-ready. We know that audits can be daunting, but with a year-round audit strategy and adherence to best practices, you can face them with confidence.

accounting seattle for audit-ready business

This article will outline 12 steps to ensure your company is prepared for an audit, allowing you to navigate the process smoothly.

1. Month-End Close

Regularly closing your books is essential. While larger companies usually have this under control, smaller businesses sometimes overlook it. Our accountants in Seattle will help you implement a routine “hard” close and reporting process that establishes a best practice and helps identify any issues early on.

2. Closing Checklist

Create and monitor a closing checklist throughout the year to ensure all month-end processes are completed and journal entries are posted. Following this checklist minimizes the chances of forgetting necessary quarterly or annual entries.

3. Documentation

Documenting, filing, and organizing may seem mundane, but they are crucial for a seamless audit. Keep track of debt agreements, leasing arrangements, lawsuits, complex transactions, technology modifications, and contracts with major customers and vendors.

4. Internal Controls

Establish strong internal controls that are operational and effective. Don’t overlook IT General Controls (ITGC) governing access and changes to financial information systems. Conducting a control assessment with an experienced consultant ensures that your controls meet industry standards.

5. New Accounting Rules

Stay aware of new accounting pronouncements and modifications to existing ones. Begin addressing these changes early, as they often require more effort than anticipated.

6. Non-Recurring Transactions

If you encounter a non-recurring or unusual transaction during the year, consult the auditors promptly. Waiting until year-end can create unnecessary complications. Examples of such transactions include property sales, significant leases, and changes in debt.

7. Balance Sheet Reconciliations

Perform balance sheet reconciliations monthly. A clean and reconciled balance sheet indicates healthy financials.

Pay special attention to bank reconciliations, which can help identify accounting errors or process issues. Smaller companies may opt for quarterly reconciliations for other accounts like fixed assets, prepaid expenses, accounts receivable (A/R), and accounts payable (A/P).

8. Customer and Vendor Aging Review

Review the A/R and A/P aging reports to address old or outstanding items. Establish a collections process for following up with customers and research vendor balances throughout the year to make necessary adjustments.

9. Revenue

Develop a process to ensure accurate recording of revenue. Guarantee timely billing for all shipments or services. Analyze year-to-date revenue and gross margin figures to ensure their reasonableness. Establish a robust process for proper year-end sales cut-off, an area that auditors scrutinize closely.

10. Expenses

Accurately record all expenses at year-end. Review subsequent disbursements to catch any missed items. Analyze year-over-year and budget-to-actual expense variances to identify recording errors and additional costs requiring accrual at year-end.

Remember to account for payroll-related accruals, such as hourly wages paid after year-end, bonuses, and earned vacation. Review repairs and maintenance expenses to identify items that warrant capitalization as fixed assets.

11. Physical Inventory

If you conduct a year-end physical inventory, plan carefully and educate your count teams. Consider performing the count before year-end and doing a roll forward with your auditor’s approval. Like the year-end sales cut-off, ensure a robust process to properly record shipping and receiving, as auditors pay close attention to these areas.

12. Asset Valuation

Verify that your assets are valued correctly. Addressing valuation concerns well before year-end allows sufficient time for research, analysis, and informed decisions.

Following these “housekeeping” guidelines throughout the year establishes a solid foundation for a successful audit.

Let Our Accounting Services in Seattle Work for You

Chief Financial Partners is here to help you prepare for your upcoming audit. Our experienced Seattle CPA professionals offer comprehensive services to ensure that your organization is ready for auditors.

Contact us today to learn more about how we can assist you with our accounting services in Seattle. Let us help you complete pre-audit work thoughtfully, timely, and effectively. 

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