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All about audits

Published: Thursday, February 1, 2018 written by Drew Jackson



All about audits

February 1, 2018

 

Have you ever been audited? By the feds, a state agency, a company you do work for? How did that go?

 

First of all, don't freak out. After the initial shock and reading the correspondence, you settle down, and say, its just an audit. A few questions come to mind.

 

What is their auditing organization's reasoning? Is this an IRS Lois Lerner moment where they have an agenda already, and not complete randomness like they purport. What have you done in the last 6 months to trigger you coming up on their radar. I am sure it is something.

 

An audit does not just happen randomly. Trust me, the system is made to trigger audits based on some person who has raised their eye brows and said, go take a look and see what you can find.

 

For me, I have been an auditor and auditing in various capacities for nearly 30 years dating back to the early 80s. From quality audits, to software audits, to accounting and financial audits, under 21 liquor audits, to sales taxes and employment audits. It's all the same. I for one don't draw a hard line against anyone during an audit.

 

Be open to critical thinking. Look at your audit as the auditor is looking at it. Be an active listener and ask good questions in a timely manner.

 

Regarding the audit - unless there is willful neglect, there is always room for improvement. The human condition exists and people have bad days, and some paperwork gets overlooked and some paperwork gets lost. If the auditor finds 99.9% of the audit okay, and then .1% needing improvement - be nice and say thank you and leave. Even if there is 1-5% error, that's okay too. Just put a plan of action in place and check back. If there is more than 5%, well, then there needs to be more conversation.

 

Oddly, by letting auditors rummage around in your stuff; they might find stuff you might not realize is there. For better or worse, this can be revealing. If you have nothing to hide, you have nothing to worry about.

 

Based on interviewing those that have been audited, here are some funny thoughts.

1. give the auditor the worst chair

2. place the auditor in the hottest or coldest room available

3. offer them treats and beverages

 

What is the take away. The audit is a learning experience for both parties. Embrace the opportunity to get a new customer and a new job. If being audited you get 4 out of 5 major categories with 100% accuracy, then celebrate. the other major category that needs improvement, pull that down like a consent agenda item and explore it and work on improving it.

 

In the end, the auditors are real people too. They can be nice and friendly, or they can be course and rough. Of course, they have to report to someone or some group back at their headquarters and sometimes the answer and purpose you get is not the answers and purpose they need to get.

 

Will they come back? Of course. When, why, and because... Keep it real America. You could be dead and this would not matter anyhow.

 

more to come...

 


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