Every year many businesses have to undergo a financial audit. When audit comes up in business talk, it is usually not a pleasant topic. In fact, many business owners fear business audits. Like all fears in life there are certain steps that can be taken that will help you overcome your fear or at least minimize it. Below I will provide some tips and tricks to easing your stress and fear levels when your business faces a business audit. In this article, the focus will be on preparing for an audit.

Why You Need To Know What the Auditor Needs

The first step to preparing for a business audit is knowing what the auditor will need. If you have the proper documentation on hand then you will make the auditor’s job easier. The quicker the auditor is able to finish, the quicker it will be for you and it will likely be cheaper.

Do Not Be Scared To Ask

When your business is notified that you will be audited, make sure to ask a very important question. Ask the auditor to provide you for a list of the information they will be looking for. Having this list of information will allow you to gather the things the auditor asks for first. By being able to break down what documents are important, you will be able to maximize the time you spend preparing. This one question will also give you the opportunity to speed up the audit process.

The Basic Information

As a business owner there is certain information that you should have organized and easily accessible. The first thing you should be doing is breaking down your expenses by month. Having your financial record broken into months will make it easier for the auditor to verify certain sets of information. Other basic information that you will need is employee contracts and payroll records, bank statements, deposit books and invoices, any third-party agreements, general ledger, inventory list, and all other legal documentation.

When the Auditor Arrives

When the auditor arrives, you want to be prepared. You need to have the above-mentioned documentation ready and easily accessible. On top of the documentation, the office manager, accountant and bookkeeper should all be on hand. These individuals may be needed to answer or help find certain information. One thing you need to make sure of is that you have time scheduled for the visit. You should not be trying to multitask while the auditor is there. Being single-minded will help speed the process along.

Although I have not mentioned yet, it is important to note that hiring a CPA is always advisable. They will be able to help you prepare and deal with the auditor. Having experience on your side ensures that nobody takes advantage of you. On a final note, it is important to remember that audits can actually be beneficial. An audit allows you to reorganize your files, and gives your employees a chance to refresh themselves on the spending rules associated with your business.

Reno CPA Tim Nelson has been helping individuals and businesses with their tax preparation and financial planning for years. Tim has a passion for numbers, so that you don’t have to. Visit Tim Nelson’s Website to download the FREE Business and Tax Preparation Organizer.

To see what else Tim is talking about, visit Tim’s Blog.

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Many organizations must undergo a regular financial audit by an external auditor. While the prospect of an audit can cause fear and trepidation for those being audited, this does not have to be the case. Knowing ahead of time what information the auditor is likely to ask for, and having that information organized and available before your first meeting with the auditor, will go a long way to ensuring a smooth and stress-free audit.

From the auditor’s perspective, an audit engagement is made much easier when clients have properly gathered and organized all required information, and are able to provide it to the auditor in a timely manner. The auditor’s job can then be completed more efficiently which can translate into fewer hours on the job, and potentially result in lower audit fees.

In preparation for the audit, and at least a month before the audit engagement is to commence, you should ask the auditor to supply you with a “shopping list” of information that he will require.

The standard monthly financial package should ideally contain much of the information that the auditor needs. Each month’s financial package should contain supporting information for all balance sheet accounts. This would include for example detail aged A/R and A/P listings, capital asset depreciation schedules, and detail of prepaid expenses, deferred revenue and accrued liabilities accounts.

When the auditor arrives, you should ensure that:

* the appropriate people will be there, such as the office manager, director, accountant and bookkeeper
* all records are collected ahead of time (see below)
* documentation is easily accessible and made available in an efficient manner, and
* adequate time is scheduled for the visit

Information typically required for an external financial audit will include:

* Employee contracts and payroll records
* Bank statements, deposit books and invoices
* Up-to-date general ledger
* Lease, contracts for rental equipment, 3rd party agreements (includes contractors and consultants)
* Up to date inventory list (if applicable)
* Capital assets sub-ledger (if applicable)
* Documentation of internal controls
* Access to board minutes, contracts, by-laws, letters patent, supplementary letters patent, legal invoices and legal correspondence
* On-site access to the bookkeeper or some other person who knows computer and filing systems

It is important that financial information is easily accessible. Whether in paper or electronic format, all financial records should be filed neatly and logically, for example in chronological order or alphabetical order. Original receipts and invoices should be available (credit cards statements and/or slips are not considered to be receipts or invoices). This would include original airline and train tickets, etc. Also, all records must be kept on site for as long as the law requires.

An audit can be very beneficial to the organization. You should use this opportunity to ask any questions, improve your internal controls and ensure that staff is aware of the rules governing the spending of your organization’s funds.

Written by Richard MacNeill

If you would like assistance in preparing for a financial audit and strengthening your organization, please contact me at 613-727-1230 ext 212 or rmacneill@otusgroup.com You can visit OTUS Group online for more useful tips and advice at http://www.otusgroup.com. OTUS Group is a firm of senior business advisors with expertise in strategic planning; financial, information technology and human resource management and business growth. Many of our clients turn to us when they face a crisis, when they need a trusted advisor or when they need expert advice to reach their goals. We work with our clients to get things done.

Richard MacNeill, CMA, CMC
OTUS Group – http://www.otusgroup.com
phone: 613-727-1230 ext. 212
email: rmacneill@otusgroup.com

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Marketing Audit (MA) is a process of comprehensive, systematic and independent analysis and assessment of company’s marketing environment, objectives, strategies and activities to identify problem areas, operational strengths and weaknesses and recommends the courses of action to be taken to improve company’s overall marketing performance and make marketing strategies and plan more effective and result oriented.

The marketing audit is having four major characteristics:

-It should be comprehensive and broad in focus covering the entire marketing environment of the company.
-It should be an objective exercise and independent of the managers directly involved in making the marketing decisions.
-It should be a systematic and orderly sequence of diagnostic steps as compared to an unstructured and random investigation.
-It should be carried out periodically. The MA should be undertaken on a regular basis and not only when major problems arise.

The main 2 variables of MA are External and Internal Environment. External variables are uncontrollable such are macro economic, politics, social, cultural etc. while internals are controllable such are marketing operation, marketing functions, system, strategy etc.

MA process comprises of basic three steps. First step is to identify the objectives and scope. This has to be done in consultation with the company officials and auditor. Second step is to collect the relevant data. While collecting data, insider company personnel are being interviewed but at the same time an outsider customers also considered a good source of data collection. The third and last step is to prepare report. The report contains main objectives, major findings and suggested recommendations.

Full MA comprises of six components viz. marketing environment audit, organization audit, strategy audit, systems audit, productivity audit and function audit. If company does not want to carry full audit then each component can be audited separately. However, full MA is recommended to get whole picture of real situation.

Although all the companies can benefit from a systematic audit of their marketing operations, but however, MA can provide better results where company is production oriented or technically oriented. Young companies can decide their marketing approach even if being inexperienced. To the nonprofit organizations also MA can provide educative and diagnostic approach. Companies having troubled divisions can be easily cured by MA and like wise high performing divisions can also be maintained and improved with the help of marketing audit.

The marketing managers are analyzing every possible solution to survive and one such tool they can use is the Marketing Audit. It is an invaluable instrument to help an organization to establish its unique competitive position and to identify its superior skills, resources and capabilities. Marketing Audit is now days proving itself a prerequisite for achieving a sustainable competitive advantage.

Azaz Motiwala is a marketing consultant and CMD of IKON Marketing Consultants India, a leading marketing consultancy company assisting corporate companies and SMEs with expert advices and solutions on various areas of marketing.IKON also provide Marketing Audit Services to Indian and foreign companies.

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Most people would count a tax audit among the scariest things you can face in your financial life. Often, they feel as if they’re being accused of doing something wrong or criminal, which can lend an atmosphere of panic to the audit.

In reality, many audits are the result of an error, often made by the IRS. The purpose of the audit is simply to rectify the mistake. Nevertheless, it can be a daunting prospect, so here are some tips to surviving with your nerves, and your tax bill, intact.

Be Nice

People who are being audited may often feel resentful towards the auditor, as if they are being picked on or singled out. This can make them lash out at the auditor, complaining about the wasted tax dollars or excessive paperwork involved in filing your tax return.

Unsurprisingly, this is likely to make the auditor dislike you from the very beginning and inevitably, if they don’t like you, they’re less likely to be lenient about any discrepancies they might find. So keep your opinions to yourself, and treat them like any other person, in a polite and courteous manner.

Keep To The Point Of The Audit

When you are called for an audit, the auditor will have questions about certain specific areas of your tax return, rather than the entire thing. This means that you need only discuss those parts – do not bring up other, unrelated areas, as you may find that you end up inadvertently uncovering other discrepancies that the auditor hadn’t originally spotted.

Of course, once you mention them, he or she will be obliged to investigate them, so you may end up causing yourself even more trouble.

Don’t Argue

If your auditor makes a point that you don’t agree with, state your case clearly and calmly to see if you can persuade them round to your way of thinking. If they still do not agree with you, don’t get into a fight with them. Their word is final, so bite your tongue and accept their decision. If you really feel very strongly that they’ve made the wrong decision, you can take your complaint to more senior staff, or even to court, but be aware that this can be a long, drawn-out process.

Don’t Be Afraid

Although it is easy to see a tax auditor as some kind of superbeing when it comes to financial law, this is often not actually the case. Because of the stresses of the job, not to mention the difficulties of having to visit people who already don’t like you before you even step through the door, staff turnover can be quite high. As a result, many auditors are newly-qualified students whose knowledge of the intricacies of the tax system leaves something to be desired.

In such a case, you may in fact know more than them, so don’t be afraid to point out areas that you feel are incorrect. Just remember to be polite when you do so – most people don’t like having their expertise called into question, so doing so in an aggressive manner is unlikely to help your cause.

By following the steps above you will hopefully find that your tax audit isn’t as scary as you’d first hoped. Do your best to work with the auditor rather than against him, and you should be able to come to a conclusion that leaves you both satisfied.

Once a self-confessed spendaholic, Paul Watkins now works hard to control his own finances, and enjoys passing on the lessons he’s learned so that others can do the same. He also loves writing, and creating websites. Check out his latest site, Wall Switch Plates [http://www.wallswitchplates.net] which includes information about how you can use wood switch plates [http://www.wallswitchplates.net/wood-switch-plates] to brighten up your home.

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