This document contains two sample audit reports that can be used by auditors for understanding and reviewing an organization’s financial close process.
Testing involved benchmarking the current state of the close process and techniques compared to common practices; reviewing areas and processes outside the finance department’s control that could positively impact finance operations; reviewing the critical path of the financial close and identified improvement opportunities; evaluating account reconciliation timing, format and completeness; and evaluating the inventory costing and revenue recognition processes.
The following recommendations were made as a result of reviewing:
- Create development plans for all staff, including succession plans for key personnel.
- Create career plans for each position and establish time frames.
- Provide staff with the opportunity to acquire new skills (commercial, technical and personal) and learn about other areas of the business.
- Actively encourage teaming and shadowing between financial inventory and operations employees to better understand the others’ responsibilities for recording and managing inventory.