For federal agencies, the path to audit readiness can feel overwhelming—like a tornado of activity across all areas of the organization. To obtain and sustain clean, unqualified audit opinions, agencies must improve financial management practices and business processes, increase efficiencies, and establish sound financial reporting processes. Attaining an unqualified audit opinion may seem like a long road, but becoming “audit-ready” can be broken down into three simple stages:
In the initial phase of audit readiness, agencies perform a whirlwind of activities around various business processes, accounting assertions, and financial statements or line items. These activities encompass all of the varying aspects of an organization, with individual activities potentially occurring at different rates.
As an organization moves from audit readiness to the audit phase, these various activities may remain in different stages—yet they all come together to form an auditable statement, line item, or assertion. The ability to render an opinion on these items may require herculean efforts, and additional work is needed to improve an organization’s financial readiness.
When an organization moves to audit sustainment, all business processes, accounting assertions, and financial statements or line items will be in order, with all aspects of the organization focused on maintaining sound financial processes. The ideal state is attaining an unqualified audit opinion with no reported deficiencies in internal controls or laws and regulations.
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