How to speed up the property audit

How to speed up the property audit

  • Posted by admin
  • On February 20, 2018
  • Comments

As we move into audit season, I’m often asked by clients why it takes so long for the auditors to complete their audits and what we, as a business partner, are doing to reduce property audit time.

Coming from an audit background and having worked on the client side for most of my career, here is a list of:

10 things you can do, as a property accountant, to speed up the audit process:

1. Before the auditors arrive, send the manager all bank details so that they can confirm all bank balances.

2. Complete the first draft of the statutory financial statements before the auditors arrive.

3. On the first day, take the entire audit team through the events that have occurred over the audit period.
Include acquisitions, disposals, refinancing, hedging, surrenders, rent reviews, capital expenditure etc. This will help all audit staff in understanding what they are auditing and reduce questions.

4. It’s a given that all balance sheet accounts need to be reconciled, however the one that always causes issues is VAT. Do a reconciliation between your year-end balance and the next VAT return post year-end.

5. Cut-off testing – the auditors will always review payments made post year-end and see whether you’ve accrued for all large payments that relate to the audit period. Do this test yourself and adjust where necessary.

6. Your rental income number needs to be accurate. Auditors will generally test this by performing a predictive analytical review. So do one yourself, it’s easy. In Excel, take the tenancy schedule over the year and calculate the expected annual rental income. Remember to take into account old tenancies as well as rent incentive and rent review adjustments. Compare the total to your balance in the P&L and explain any differences. If you give this analysis to your auditor together with any new lease agreements concluded in the year, you should save a lot of time.

7. Have all company minutes and legal documents for any transactions to hand.

8. Always review repairs and maintenance accounts and capital expenditure accounts in detail, so as to ensure that all material items have been correctly accounted for in capital or revenue.

9. Follow up, on a daily basis, with the auditors to see how things are progressing and whether anything is holding them up. By being proactive, you will speed the audit process up.

10. FINALLY, before the audit team leave, enquire as to whether their work has been reviewed by the audit manager and with all queries completed. NOTHING more frustrating than the audit team having to come back to do additional testing post the audit manager review.

Hope this helps. If you need any assistance or have any questions, contact us