Make your Accounts “Clean Audit Ready” Fast and Efficiently!

With the AGM deadline fast approaching, and a tricky payroll migration thrown into the mix, this Not-for-Profit was up against some serious audit hurdles. By using a structured, risk-aware approach, I got them Clean Audit Ready in no time!

The Challenge

Getting clean audit ready

With a messy payroll migration the audit process was full of gaps, questions and issues.

Even when well planned and executed, a payroll migration will create audit problems simply because payrolls are complex and our tax and industrial relations laws are messy.  The closing data of the old payroll must match exactly the opening data of the new one – throw the complexity of setting up for the SCHADS Award into the mix, and getting Clean Audit Ready after a migration becomes even more complex.

Key issues arising from a payroll migration can include:

  1. Incomplete or Inaccurate Data Transfer: If payroll data isn’t correctly migrated, important information like employee details, salary records, tax withholdings, and benefits may be missing or incorrect.
  2. Inconsistent Payroll Records: Discrepancies between old and new systems may arise resulting in mismatched records, creating confusion and pay errors.
  3. Lack of Proper Documentation: Missing migration documentation, such as detailed steps of the process, data validation checks, and audit trails, can hinder the auditor’s ability to assess the accuracy of the migration.
  4. System Integration Issues: If the new payroll system doesn’t integrate smoothly with the other financial systems, errors in financial reporting can arise.
  5. Manual Adjustments: If manual corrections are made during or after the migration to fix errors, there will be questions about internal controls that could result in extra scrutiny.

Thankfully, not every migration faces all of these issues, but it’s very common for three or four to pop up. If they aren’t addressed before the audit begins, they can cause delays, higher audit costs, and potentially negative audit outcomes.

The Bottom Line

I created and launched a robust pre-audit review program that paved the way for a seamless audit, as shown by these impressive results:

100%

Payroll Workpapers Completed

Each General Ledger account had a detailed workpaper, clearly mapping out the payroll migration entries and their impacts, both before and after the transition.

– 5%

Savings in Audit Costs

By streamlining the processes into pre-audit and audit work, we achieved significant cost savings — my time is more budget-friendly than the auditors’!

100%

Happy Staff

A few errors spotted during audit prep were swiftly corrected, making sure all staff received the right pay and increasing overall confidence in the system.

clean audit ready

The Process

After appointing a capable CFO who continued to face challenges, the Board quickly realized that new hires alone wouldn’t solve the issues. I was brought in to conduct an Pre-Audit Issues Review, uncovering the root causes and pinpointing the areas of weakness. From this, I developed a project proposal, which was approved.

  • Reviewed Staff Contracts to ensue each employment agreement was in accordance with the SCHADS Award, Fair work etc

  • Confirmed each contract was correctly setup in the new payroll i.e. the paperwork and the system matched, several “typos” were discovered and resolved, including back-pay to cover errors

  • Created a comprehensive pre-migration “snapshot” that clearly showed each and every balance as at the closing point of the obsolete payroll system.

  • Created a comprehensive prost-migration “snapshot” that clearly showed each and every balance as at the starting point of the new payroll system.

  • Created a detailed migration “map” that clearly showed how each and every balance transitioned between the old payroll system and the new one. Including clear explanations for the errors and omissions and glitches that had occurred and later been corrected.

  • Updated the ATO STP reporting because the ATO have very specific requirements about payroll migrations and ensuring employee year end tax submissions are correct.  For more information see here… Changing your payroll solution

  • Implemented stringent payroll processes – engaging payroll staff to use enhanced record-keeping year-round, creating a reliable audit trail that made it effortless to be audit-ready at the end of each financial period.

The process was challenging and stressful, given the tight deadlines. However, by putting in several 12-hour days and a few weekends, I ensured the accounts were ready for audit on time, bringing relief to everyone knowing that the payroll was accurate and functioning smoothly.

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clean audit ready

Conclusion

The auditor was relieved to thoroughly understand and verify all payroll information before, during, and after the migration.

I worked with payroll staff and the CFO to rectify incomplete records and inaccurate data, ensuring that staff felt confident their paychecks were fully compliant and accurate.

The new payroll system is now operating seamlessly and is fully compliant.

I also used the opportunity to enhance processes and update reports, embedding practices that guarantee the organization remains effortlessly audit-ready at the end of each financial period.

“Eve’s expertise during our audit preparation was truly transformative! Her meticulous attention to detail and incredible intuition for pinpointing issues made the entire process seamless and stress-free.

Thanks to her guidance, we not only met all our AGM deadlines but also uncovered valuable insights that will elevate our future audits!”

Don Grjic -Clean audit Ready
Don Grjic

CFO

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