Audit Planning Calendars Can Make Audits Less Stressful and More Efficient

Financial statement audits have natural “built-in tensions” between nonprofit organizations and their independent auditors. These tensions are advantageous from a checks and balances point of view but can lead to communication challenges if not properly managed. Agreeing on a detailed planning calendar at the front end of the audit will make for a less stressful and more efficient audit process.

Audit planning calendars, like finance calendars, can help mitigate “controllable” tensions associated with requests for information and scheduling alignment. It is important to recognize that the two parties in the audit process have separate and sometimes differing needs and priorities. Discussing and agreeing on key actions and deliverable dates ahead of time will enhance understanding of each party’s perspective and encourage cooperation.

Nonprofits should be proactive and prepare their own audit planning calendars. Do not rely on general templates provided by the auditor or from other sources, as an audit planning calendar should be scaled and constructed to meet the needs of your organization and align with its meeting schedules.

Divide your audit planning calendar into chronological sections such as:

• Pre-Audit Planning Meetings – (Dates)

  • Staff Audit Planning Meetings

  • Audit Committee Initial Planning Meeting

  • Auditor Introductions (Meet Audit Team and Exchange Information)

• Auditor Risk Assessment Surveys and Meetings – (Dates)

  • Receive Fraud/Scope/Risk Assessment Surveys and Questionnaires

  • Staff Risk Assessment Meetings with Auditor

  • Audit Committee Risk Assessment Meeting with Auditor

• Release Trial Balance and Requested Information to Auditors – (Date)

• Start Field Work – (Date)

• Draft Reports – (Dates)

  • 1st Draft

  • 2nd Draft

  • Final Draft

• Concluding Audit Committee Meeting with Auditor – (Date)

  • Auditor Presentation of Audit Reports, Findings and Observations to Audit Committee

  • Audit Committee Recommendation to Board to Accept

• Board Approval and Finalization – (Date)

If you have not prepared an audit planning calendar before, start with a simple scaled back approach. As the years pass and your experiences build, add sections and details to better match and align to your organization’s needs.

Planning Tip – Consider assembling the audit planning calendar for the next audit as the last step (concluding action step) of the previous year audit. There are advantages to this early approach. The staff and audit committee would have just finished their discussions and assessment of how the completed audit went, leaving them with fresh impressions. Also, early corrective actions can be identified and incorporated into the next audit planning calendar. This reduces the chance of repeating past mistakes and will make the next audit process more efficient by helping to ensure that new action steps and procedures are integrated more quickly and with a higher degree of success.

My favorite benefit related to audit planning calendars comes from the process of sharing them widely. Sharing the first draft and subsequent updates with the audit committee and auditor as soon as they are prepared will alert them to important action dates and encourage their feedback and approval. Sharing the initial audit planning calendar with the finance committee, Board, management, and staff will help them to visualize the process and better prepare for calls to action such as answering auditor questions, providing schedules, responding to risk assessment surveys, and taking actions related to the approval process.