EFFICIENCY TIPS
(excerpted from Fourteen Habits of Highly Efficient Auditors)
GENERAL PLANNING MATTERS
Documents needed to begin the field work - To assure efficient completion of the engagement, it is important to get off to an efficient start. One way to do so is to ascertain that the major documents are available upon entry, eliminating the tendency to "drift" while waiting for documents to be produced by the client.
Specific dates - It is helpful to include specific dates that documents will be needed, when the auditors will be present, etc., and communicate them to the client, with a request that any variances be brought to the auditor's attention far enough in advance to avoid losing time to miscommunications.
Other client needs and concerns to be addressed - Many engagements extend beyond the traditional GAAS opinion, to include, for example, consulting matters of an ongoing nature. A clearly communicated understanding of these matters enables the auditor to gather applicable information during the course of the audit, allowing double use of the audit evidence gathering time, increasing realization rates.
SHIFT AS MUCH CLERICAL WORK AS POSSIBLE
A simple rule of audit efficiency is to shift as much of the nonprofessional work as possible to the client. In addition to selecting and refilling invoices, clients can prepare schedules, reconcile accounts or perform clerical tasks, such as stuffing confirmation envelopes.
USE INTERIM PROCEDURES
For most engagements (at least for some account balances), the risk of material misstatements is sufficiently low, so that interim procedures do not increase that risk to an unacceptable level.
DO THE HOUSEKEEPING FIRST
Did you ever consider how much audit time is spent in "housekeeping" activities? If you were not required to perform those clean-up entries for the client, who cannot produce a reasonably adjusted trial balance, by what percentage would your adjusting entries decrease? Just consider them part of an accounting service preparatory to the audit, rather than a part of the audit. Consider yourself, during the performance of these services, as the client's in-house accountant. Prepare whatever schedules you need to support the adjustments required, but remember, that now they are simply schedules, they are not "audit working papers". "Schedules" can be prepared more quickly than "audit working papers", since they need only contain enough information to support an adjustment.
HIT THE HARD STUFF EARLY
Begin your audits with the most difficult/most time consuming portion of the engagements. Starting with those areas provides more time to effectively resolve problems that may arise, including the need for consultation. And once those areas are done, the rest of the engagement is downhill.
AVOID THE "DILLY METHOD"
How many of your audit work papers are produced by the DILLY (Do It Like Last Year) method? Every working paper prepared should add something to the body of audit evidence. No work papers should be prepared just because they were prepared last year. Every working paper should count for something because every working paper costs money.
GIVE UP ON BEING PERFECT
Accept the fact that you live in a world full of imperfection. One of the causes on inefficiency is the compulsion some people have to be perfect, and do perfect work. While all of us realize that perfection is unattainable from a practical standpoint, it is amazing that people frequently operate as if it could be attained. Give yourself (and your staff) permission to simply perform at a level of "excellence". It's much more realistic, and its actually achievable.
REVIEW THE WORK OF ASSISTANTS DAILY
Many organization wait until the end of the engagement to perform the initial (detailed) working paper review. Reviewing the work of assistants daily (usually first thing every morning) brings problems to the attention of the reviewer sooner in the engagement, provides for correcting any working paper deficiencies or gathering additional information required while the information is still fresh in the preparer's mind, and perhaps before the source documents have been refilled. In short, it eliminates the need to "re-audit" an area entirely, providing for maximum efficiency.
GET THE PAPERWORK DONE
Sometimes the most difficult place to complete a job is in your office. There are literally dozens of interruptions - the telephone, the staff, the clients who drop in unannounced, the perpetual crises that demand your undivided attention, and on and on. The result is that the tasks that are frequently interrupted require excessive time to complete, due to stopping and restarting requiring that you get reoriented every time you start again. One way to avoid this is simply to stay in the client's office. Stay there and draft the report, prepare the tax return, perform the final review; do it all there.