How to Prepare for Your Annual Audit
Introduction
Section titled “Introduction”An audit isn’t something that happens to you — it’s something you prepare for. Boards that treat it as a collaborative process get faster results, fewer surprises, and lower professional fees.
What Auditors Are Actually Doing
Section titled “What Auditors Are Actually Doing”Your auditor’s job is to provide independent assurance that your financial statements are fairly presented. They’re not looking for wrongdoing — they’re verifying that the numbers tell the true story.
What They’ll Typically Ask For
Section titled “What They’ll Typically Ask For”- Bank statements and reconciliations for the full year, for all accounts
- A detailed trial balance
- Invoices supporting major expense items
- Reserve fund statements and the most recent reserve fund study
- Board meeting minutes referencing financial decisions
- Contracts signed during the year
- A list of condo fee arrears and the policy for handling them
- Any loan documentation
How to Make it Easier
Section titled “How to Make it Easier”Start gathering this information before the auditor asks. Make sure all entries are posted and reconciled. Respond to auditor requests promptly — delays on your end extend the timeline and can increase fees.
The Management Letter
Section titled “The Management Letter”After the audit, your auditor may issue a management letter identifying internal control weaknesses or process improvements. Take it seriously — it’s professional advice from someone who has seen how things go wrong.
The Fund Accounting Advantage
Section titled “The Fund Accounting Advantage”A well-maintained fund accounting system makes audit preparation dramatically easier. When operating and reserve fund activity has been tracked separately all year, the auditor can see exactly what they need without asking you to reconstruct records.
Disclaimer: For general informational purposes only. Not legal, financial, accounting, or tax advice.