Why I love the MNCPA audit
May 22, 2019 | Faye Hayhurst, CPA
You might notice a spring in my step and a sparkle in my eye. There’s excitement and anticipation in the air (at least in my corner of the office). What good thing is prompting this reaction? Why, the annual audit of course!
For anyone who thinks that might be slightly strange, let me clarify: Not all audits bring me joy. Receiving correspondence from the IRS, Department of Revenue or any other regulatory body about their plan to audit some segment of the organization is cause for a heavy sigh of resignation. While we always strive to do things by the book, it can be intimidating to have someone looking through records with a fine-toothed comb, especially when they seem to relish finding some point of noncompliance. That’s how I learned, thanks to a sales tax audit some years ago, that a $2 service charge to customers to cover the shipment of goods is subject to sales tax. Lesson learned; the state has been getting their cut of that $2 charge ever since.
A financial statement audit is different. First, the financial statements belong to us. Although we have to follow the parameters of financial reporting standards, we have some flexibility in how we present things and how we tell our story. Through the years, we’ve made changes in how we’ve done that to reduce clutter or to highlight some facet of what we do.
Second, the audit is an accountability check. The accountability is not only external (to the auditors), but internal as well. Sometimes in the day-to-day operating environment, it’s easy to treat things as routine and not look at them deeply. But, when pulling together information for the auditors, sometimes I’ll be struck by something I hadn’t noted before, such as a transaction that should have been coded to a different account. I’m also compelled to make sure I understand and can explain what happened during the year under audit to cause a different result from the prior year for a particular financial statement line item. That often means conferring with colleagues in other departments in more depth to confirm or expand my (and their) understanding. That’s a good thing!
Third, the audit helps us be the best version of ourselves. The auditors bring in a fresh perspective that may highlight something we’ve overlooked or hadn’t thought of. They can spot flaws I may be blind to and are happy to share best practices for how we can be even better. (I like to think we provide them with examples of good practices that they can share with other clients as well.)
The MNCPA is not required to have an audit, but we believe in its value. As a not-for-profit organization, we want to show our stakeholders that we’re transparent and open to scrutiny. I can also attest to the fact that each auditor and audit firm we’ve engaged has added something new and helpful. And knowing I’ve passed their scrutiny reinforces my confidence in the work my staff and I are doing.
What’s not to love?
Topics: Accounting & Auditing, Not-for-Profit
Faye Hayhurst, CPA
Faye Hayhurst is the MNCPA director of finance and administration. She is committed to using numbers to tell relevant stories, although she also employs words, charts and occasionally clothing to communicate a message. While some have questioned her about the pressures of being the CPA for the MNCPA, Faye considers presenting financial information to fellow CPAs a dream job. Outside of storytelling with numbers, Faye enjoys directing her church's handbell choir, visiting national parks and other scenic places, and checking out the chocolate products at Trader Joe's. Faye can be reached at 952-885-5540 or firstname.lastname@example.org.
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