Helen Mason, Senior Managing Director, Riveron, has 13+ years of progressive experience in accounting and financial leadership roles.
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:
Strengthen collaboration among key stakeholders.
To make the audit process genuinely effective, it’s essential that all stakeholders—accounting and finance teams, auditors, company leadership and the audit committee—work closely together throughout the year. This ongoing collaboration ensures that feedback is actionable and that areas for improvement are addressed promptly.
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.
Implement process improvements immediately.
One key advantage of transitioning to a year-round audit engagement is that businesses can enhance their processes in real time rather than waiting for the next audit cycle. Common areas for improvement, such as internal controls, data accuracy and financial reporting efficiency, benefit from constant tweaks. This proactive approach helps businesses stay prepared and ensures that processes are continuously optimized rather than just in the lead-up to the audit.
Leverage audit feedback for strategic decision-making.
Audit results provide more than just a snapshot of past performance—they can offer insights that impact broader business functions. By regularly reviewing audit feedback, businesses can use it to inform strategic decisions, such as better forecasting, risk management and operational efficiencies. When audit feedback is integrated into the broader business strategy, companies can drive continuous improvements that support long-term success.
Rethinking Audit As A Year-Round Business Asset
The best finance and accounting organizations use audits to assess past performance and drive future long-term business improvements. When audits are treated as an ongoing, year-round process, businesses can improve internal controls, reduce costs and strengthen their financial strategies—all while fostering a culture of collaboration and continuous improvement.
By rethinking how audits are approached and building stronger relationships with auditors, companies can turn the audit season into a hidden superpower, ultimately supporting their broader business objectives and better ensuring long-term success.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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