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A version of these insights first appeared in Forbes Finance Council.
Accounting and finance teams often find it difficult to diminish the anxiety and inevitable angst around the annual close and corresponding audit. They might rush to finalize annual financials, causing stress to mount as deadlines loom. However, reframing audits can illuminate the process as a useful tool for value creation.
When conducted strategically, audits can be more than just a compliance exercise. By continuously collaborating with auditors, engaging audit committees, and embracing feedback throughout the year, businesses can extract tangible value that extends across departments. This shift can help improve accounting functions and employee experiences, streamline processes, and ultimately drive better business outcomes.
The Compliance Trap: Why Audits Are Often Seen as a Burden
Audits are inherently backward-looking, focused on reviewing past financials and ensuring that the company has complied with established standards. This retrospective nature often causes businesses to view audits as legal necessities, but not necessarily something that can drive future improvements and strategic insights.
The reactive approach that most companies take results from this backward focus. The scramble to make process improvements during audit season—often from December to January—adds unnecessary pressure and tensions between participating parties. There’s often a “them vs. us” mentality in which companies withhold nuanced and complex information from auditors until the last minute.
For example, if a company has recently made several acquisitions, it might be aware of complexities in the related accounting and only reveal limited, high-level details to avoid slowing momentum at the start of the audit. Later, the limited initial communications on those complex accounting matters might cause the auditor to seek lengthy or last-minute clarifications and consultations that could hinder a company’s timely, successful audit process.
Shifting the Mindset: From Compliance to Value-Creation
What if businesses abandoned the “what happens in audit season, stays in audit season” approach and treated audits as a year-round engagement? Instead of scrambling to meet deadlines during audit season, businesses should focus on continuous improvements and keep their teams in a state of readiness year-round. This shift also offers the potential for significant savings, as businesses can avoid the last-minute rush that often leads to inflated staffing costs and instead take advantage of the expanded off-season availability of audit teams, which may provide opportunities for discounted fee structures.
A company’s leadership, audit committee, and auditors should collaborate throughout the year to create a continuous feedback loop. This ongoing engagement allows businesses to make necessary adjustments and improvements without the stress of last-minute fixes. Regular communication enables organizations to identify hidden inefficiencies, potential risks, and opportunities for process enhancements well before the audit season arrives, creating a smoother and more efficient experience when it’s time for the formal review.
Such collaboration can also offer valuable insights that improve not just accounting functions but also broader business strategies. By working together year-round, the auditors can provide actionable feedback that helps refine financial processes, mitigate risks and align strategies with long-term goals.
Practical Steps for Extracting Value from the Audit Process
To make the audit process truly valuable, companies can take these concrete steps throughout the year to ensure that they are leveraging audit feedback effectively:
- Conduct regular post-audit reflection sessions. Instead of waiting until the end of the formal audit season to reflect on what went wrong or what could be improved, companies should hold post-audit reflection sessions regularly. These sessions can help teams to identify the proactive measures that have been working well, where the biggest challenges occurred, and what those challenges reveal about valuable recommended changes the company could make to its internal processes.
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- Conduct regular post-audit reflection sessions. Instead of waiting until the end of the formal audit season to reflect on what went wrong or what could be improved, companies should hold post-audit reflection sessions regularly. These sessions can help teams to identify the proactive measures that have been working well, where the biggest challenges occurred, and what those challenges reveal about valuable recommended changes the company could make to its internal processes.
- Conduct regular post-audit reflection sessions. Instead of waiting until the end of the formal audit season to reflect on what went wrong or what could be improved, companies should hold post-audit reflection sessions regularly. These sessions can help teams to identify the proactive measures that have been working well, where the biggest challenges occurred, and what those challenges reveal about valuable recommended changes the company could make to its internal processes.
- Conduct regular post-audit reflection sessions. Instead of waiting until the end of the formal audit season to reflect on what went wrong or what could be improved, companies should hold post-audit reflection sessions regularly. These sessions can help teams to identify the proactive measures that have been working well, where the biggest challenges occurred, and what those challenges reveal about valuable recommended changes the company could make to its internal processes.
To make the audit process truly valuable, companies can take these concrete steps throughout the year to ensure that they are leveraging audit feedback effectively:
- Conduct regular post-audit reflection sessions. Instead of waiting until the end of the formal audit season to reflect on what went wrong or what could be improved, companies should hold post-audit reflection sessions regularly. These sessions can help teams to identify the proactive measures that have been.
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We help companies before, during, and after the audit. Riveron alleviates the burden on your team—enabling you to meet audit deadlines, identify accounting inefficiencies, and accelerate strategic improvements post-audit.
The team developed custom solutions to streamline key processes, including updating revenue elements and arrangements from sales orders, adding professional service fees as line items on sales orders, updating project task and milestone statuses, and adjusting amortization schedules on journal entries and bills to assist in accurate accruals and revenue recognition.
The automation of customer, sales order, and project syncing to and from Salesforce (SFDC) ensured seamless data integration and eliminated manual intervention, enhancing efficiency and accuracy. The global organization was able to comply with ASC 606 revenue recognition standards through streamlined reporting and financial processes that aligned with regulatory requirements. By adopting automated processes, the organization simplified operations, reduced complexity, and enabled a more agile and scalable workflow.
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The automation of customer, sales order, and project syncing to and from Salesforce (SFDC) ensured seamless data integration and eliminated manual intervention, enhancing efficiency and accuracy. The global organization was able to comply with ASC 606 revenue recognition standards through streamlined reporting and financial processes that aligned with regulatory requirements. By adopting automated processes, the organization simplified operations, reduced complexity, and enabled a more agile and scalable workflow.
The solution design also included additional functionality to enhance operational efficiency and compliance, such as generating international tax reports, managing withholding tax, creating tax audit files, and a drag-and-drop feature for seamless document handling.
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The automation of customer, sales order, and project syncing to and from Salesforce (SFDC) ensured seamless data integration and eliminated manual intervention, enhancing efficiency and accuracy. The global organization was able to comply with ASC 606 revenue recognition standards through streamlined reporting and financial processes that aligned with regulatory requirements. By adopting automated processes, the organization simplified operations, reduced complexity, and enabled a more agile and scalable workflow.