If an unusual transaction occurs, keep documentation of your decision-making process. Ensure donor documentation is obtained and retained for every contribution received. This includes both documentation from third parties and of the considerations made when entering into a new transaction. By performing the rollforward on a monthly basis, you avoid the difficult calendar-year to fiscal-year conversion, and you often save time if your brokerage account statements are difficult to decipher. Some brokers only provide calendar year-end statements, or they have statements that may be difficult to interpret. You should also consider performing the investment rollforward process on a monthly basis. If you wait until year-end, you may not have enough time to resolve the issue prior to the audit. Completing reconciliations on a more frequent basis allows you to identify, investigate, and resolve issues in a timely manner. Perform Reconciliations Monthly or Quarterlyĭo not wait to perform them until year-end. Your auditor can also enlist the assistance of other professionals, such as those knowledgeable in federal tax, state and local tax, IT, or accounting, to analyze the possible implications of new transactions from multiple angles. When you contact your auditor in advance, they can help you perform the correct accounting treatment the first time around instead of correcting it on the back-end.

If an unusual event occurs, or you are thinking about entering into a new transaction, give your audit professionals a call. Here are three activities to perform on a monthly basis: Ask Questions Throughout the Yearĭo not wait until onsite work begins. Remember that audit prep is a year-round exercise. start early – as soon as the year ends, begin working on the prepared-by-client (PBC) listing.prepare for the audit each month – don’t wait until year-end,.To reduce your stress when preparing for your next annual financial statement audit, try this two-phase approach: It’s no secret that financial statement audits tend to raise the anxiety levels among the people involved.

How to prepare for a financial audit