Assisting Organizations in Navigating A Complex Accounting and Auditing Environment
The world of accounting and auditing, once a relatively sleepy corner of the business world, has undergone significant change over the last twenty years. This has manifested in:
Change Has Introduced Challenges
CFOs and Controllers charged with responsibility for the accounting and control environments at their companies have been impacted by these changes. And, this impact is felt by any company getting an audit, public or private.
A “Knowledge Gap” (as depicted) may exist between internal capabilities and the capabilities required to engage with auditors and deal with technical accounting issues and other matters necessary to successfully work through a financial statement audit.
Other challenges include:
Internal accounting teams already have full-time jobs before the auditors come along. While most companies see the value in timely and accurate reporting, few understand the workload necessary to achieve this. When an audit gets added to the bargain, even the most efficient team will be stretched. Audits simply entail many things that are not necessary to or a part of, a regular financial close. And those additional things are time consuming.
Most auditors expect the accounting team to deliver complete financial statements with all of the relevant notes, schedules supporting any number in the notes, and analyses supporting the accounting conclusions reached. These analyses usually mean an accounting research paper analyzing the facts, assessing the appropriate accounting considerations and supporting the conclusions reached by the company. There is an art to preparing and delivering this. And the skillset needed often does not reside inside the company.
Accounting guidance provides a reference for taking business activity and presenting it in a fashion that is consistent across companies. Regulatory rules are not different in this respect. They provide guidance for consistent disclosure and presentation. With the added weight of their regulatory nature. It all seems simple enough. Just follow the guidance and the rules. While straightforward on the surface, there is often room for interpretation of how your fact set fits the guidance. And how to present your conclusions with your auditors in a collaborative fashion that honors their role as independent auditors. All of this requires expertise and experience.
Why Choose Edward Thomas Associates
Reducing Risk: The costs of errors or non-compliance can be massive. Work with a team that understands the environment and how to operate within its confines.
Saving Your Teams’ Time: Audits are vital and necessary, but they take time away from addressing day-to day-activities of normal responsibilities. Also, the amount of time required for the audit process is often underestimated.
Saving Money: Good internal controls reduce audit fees. Best to begin internal control documentation before the auditors arrive and leverage the efficiencies of working with a firm such as Edward Thomas Associates.
Solving Problems: Companies can no longer discuss accounting and auditing issues with auditors without risking a control deficiency finding and the additional scrutiny that comes with that. CFOs and Controllers need a trusted resource from which they can receive prescriptive advice and direction. .