‘Tis the Season: Making Your Yearend Audit Less Fearful
By Ryan Gorman, Senior Manager at Wolf & Company, P.C.
‘Tis the season to be jolly, right? The holidays are fast approaching and with it comes an overload of food, family, friends and fun… at least for most people. For a few too many of us in the start-up world, the Holidays are just a reminder of the Grinch counting down the days until yearend close and your yearend audit. If you’re reading this post, you most likely know all too well the stresses associated with yearend. Here are a few tips from TCN sponsor Wolf & Company P.C. to ease your anxiety as yearend approaches:
Be proactive
Last minute Holiday shopper? Don’t be! Get your information request list from your audit team as soon as possible. It’s better to prepare ahead then cram it all in the night before. Keep in mind that many of the items on the information request list can be prepared well ahead of time. Also, ensure your accountants are aware of any significant transactions during the year or any significant changes to your business.
Dust off last year’s management letter
Last year you may have received a holiday gift from your accountants… an internal control deficiency letter! Much like the sweater your crazy Aunt Elma gave you; it went into the bottom drawer and hasn’t been seen since. Well, it’s time to open that bottom drawer, dust off the letter and get moving. Address each of those items before the end of the year to avoid any repeat comments. Call your accountants for ideas on best practices for implementation. Addressing those comments now will make you look like a hero later (unless of course you’re wearing Aunt Elma’s sweater).
Anticipate pain points
Getting scrutinized doesn’t just happen around the dinner table. Avoiding scrutiny from your family and friends is about as easy as avoiding scrutiny during your yearend audit. Anticipating these areas is one way to ensure you are prepared. Focus in on areas of significant judgment and estimates. Review your allowance for doubtful accounts based on your current receivable portfolio. Review for the necessity of any inventory reserves for items selling at a loss, damaged goods or slow-moving items. If you have significant goodwill or intangible assets, review your projections for next year and ensure they are reasonable and achievable.
Avoid last minute surprises
Surprise…. The in-laws dropped in for an extended visit. Fantastic! As much as we want to help our clients out, you are on your own on that one. What we can help you with is to avoid any last minute audit surprises. Is there any new accounting guidance that impacts your organization? Call your accountants and discuss it with them before yearend. Do you have to comply with any debt covenants? If so, perform preliminary calculations to know whether you are in compliance. Do you have any new reporting requirements or deadlines? Review all new agreements and provide copies to your accountants. Now is the time to take a look at these areas to avoid the headaches down the road.
The Capital Network and Wolf & Co want to wish you a happy holiday season full of cheer, and not fear! If you’d like to hear more ideas on how to make your yearend audit less fearful, contact Wolf & Co, a long-time TCN sponsor and high quality accounting firm.
Wolf & Co. Technology Services Team:
Scott Goodwin: 617-428-5407
Ryan Gorman: 617-428-5482
