A financial statement audit can be a costly and time-consuming process, which is why seeking expert advice on audit preparation is essential to ease the burden on your accounting department.

When the auditors are ready to start their work, they expect that the client will be ready to go with reconciliations, client prepared workpapers, and explanations related to business operations and related reporting.

Not being prepared for the audit often results in delays in issuing the financial statements. It can also cause significant inefficiencies with the auditors and interruptions in the daily work routines of the accounting department—both of which result in higher fees for the audit.

Such challenges are common for start-ups and small-to-medium enterprises undergoing an audit for the first time. 

Having an audit preparation team assist with navigating the process and helping prepare before the audit ensures your financial statements are accurate, compliant, and supported. This in turn results in a successful and economical audit process.

Eddie Shamas, the lead partner of Grobstein Teeple’s Assurance department understands these concerns and is committed to assisting businesses looking for guidance on how to prepare for a financial statement audit.

For businesses facing a first-time financial statement audit, Shamas works closely with external auditors as an internal liaison—acting as a trusted intermediary and extension of your business’s own accounting team.

“Audit preparation is the work we do for a company that has either never been through a financial statement audit before or is looking to ease the burden on its internal accounting team so they can continue to focus on the day-to-day accounting tasks,” Shamas said.

“Having years of experience completing and preparing for financial statement audits, our team can effectively and efficiently prepare audit schedules and reconciliations and eliminate the back and forth with auditors.”

“There may also be issues around compliance with Generally Accepted Accounting Principles. Resolving compliance issues prior to commencement of the audit will result in a coherent and cost-effective audit.”

The value of expert financial statement audit preparation 

Financial statement audits are instrumental for businesses looking to raise capital or seek debt financing.

“Lenders or investors looking to provide capital to your business will require that your financial statements have been audited by a qualified independent third party,” Shamas said.

“When it comes to preparing for a financial statement audit, what we do is clean up the financial reporting, ensure GAAP compliance, confirm that adequate internal controls are in place, and prepare all the work papers that will be requested by the auditors,” Shamas said.

It’s a comprehensive pre-audit engagement that not only identifies potential red flags before they become a problem but also helps minimize disruptions to any subsequent financial statement audit process.

“The learning curve for audits is really high,” Shamas explained.

“Businesses should consider the costs of their internal accounting team’s time when preparing for an audit. This is crucial when evaluating the potential benefits of hiring an external audit preparation team.”

When to consider an audit rescue

Shamas has spent over a decade at Grobstein Teeple assisting clients prepare for financial statement audits.

He says that when things go awry with a company’s external auditors, it may be time to consider an ‘audit rescue.’

An audit rescue is helpful when businesses encounter an obstacle during a financial statement audit that prevents its auditors from proceeding with or completing the audit.

These delays often result in additional expenses and a lag in issuing a company’s financial statements. 

Grobstein Teeple focuses on investigating and addressing complicated issues identified by the independent auditors during a financial statement audit—highlighting the type of financial discrepancies, control failures, or compliance gaps that may prevent auditors from completing their work.

“There are many similarities between the sort of work we do for audit preparation and audit rescue,” Shamas said.

“We’re either going in and fixing everything on the front end before the auditors come in or we’re coming in to help out when something has gone wrong during an audit.”

Shamas emphasizes that stakeholder coordination is crucial for a successful audit rescue.

That’s why Grobstein Teeple serves as a trusted intermediary between the company’s management team, the audit committee, and external auditors—ensuring all parties have a clear understanding of the measures being implemented. 

Need financial statement audit preparation or rescue advice?

While it’s common for many start-ups and small businesses to manage their own financial statement audits, it’s not always a sensible strategy given the risk of cost overruns and potential for long delays.

“In terms of costs, you’re spending a little bit of money on the front end to prepare for an audit that will helpfully proceed in a more timely and smoother manner with that all-important front-end investment,” Shamas said.

If you need advice regarding financial statement audit preparation or rescue, please contact Eddie at [email protected].