Should Your College Consider Outsourcing Audit Preparation?

Imagine a world where your institution's audit process is not only seamless but also enhances productivity and compliance.

Explore the transformative benefits of outsourcing audit preparation tasks and discover how leveraging modern technology, focusing on core responsibilities, and enhancing data security can revolutionize your approach to audits.

What do colleges need to consider when preparing for an audit?

Before declaring your institution audit-ready, consider the following:

Accounting

• Are all balance sheet accounts reconciled regularly?
• Do AP/AR subledgers match the general ledger?
• Is there a documented month-end close process?
• Are journal entries approved and documented?
• Are policies current and staff cross-trained?

Student finance/Financial aid

• Are tuition and fee receivables reconciled to the general ledger?
• Are aged receivables reviewed and addressed?
• Is unearned revenue properly recorded?
• Are federal drawdowns reconciled with internal records?

Purchasing

• Are open purchase orders reviewed and closed properly?
• Is the procurement process followed and documented?
• Are departments trained on purchasing policies?

Budgeting

• Are budget reports shared regularly?
• Are budget transfers processed and documented?
• Are departments trained on budget timelines and procedures?

If these questions are hard to answer, consider hiring an outsourced CPA firm for audit preparation.

Benefits of outsourcing audit preparation

Improved compliance and accuracy

Outsourcing audit preparation can significantly improve compliance and information accuracy provided to auditors. Experienced CPA firms can help align the documentation with complex regulatory requirements. This helps reduce errors, omissions, and discrepancies, enhancing the overall quality and reliability of audit reports. Outsourced CPA firms can also help your institution identify areas for improvement and suggest best practices to implement.

Focus on daily responsibilities

Outsourcing audit preparation can help your institution enhance daily operations by enabling staff to concentrate on core responsibilities rather than dealing with complex audit requests.

By providing capacity for internal resources, your staff can dedicate time and effort to more strategic responsibilities, increasing overall productivity, efficiency, and overall morale.

Modernized technology

To help improve efficiency and quality, outsourced CPA firms often prioritize investing in significant capital to equip themselves with the most up-to-date technology. Leveraging this modern technology can help your institution stay competitive, adapt to evolving market conditions, and achieve greater operational excellence.

Common objections to outsourcing — dismissed

Does outsourcing cost more in the end?

Outsourcing can be a cost-effective solution for institutions aiming to improve operations and reduce expenses. By delegating tasks such as audit preparation, your institution can avoid the significant costs associated with hiring, training, and maintaining a qualified internal team. Also, being more prepared, having accurate data and financial statements could reduce the overall external auditor cost.

Loss of control over information

One barrier to accepting outsourced assistance is that it might depict a loss of control over information like financial records and operational data. Establishing clear guidelines and regular communication can effectively mitigate concerns related to ownership. In addition, regular reviews and feedback mechanisms can be put in place to maintain productivity and alignment with your institution's goals.

Data security concerns

Outsourcing data-sharing increases the risk of breaches and unauthorized access due to more entry points for cyberattacks. This can compromise the confidentiality of sensitive information, leading to financial losses, reputational damage, and legal issues.

CPA firms invest heavily in advanced technology to secure transferred data, focusing on both external and internal threats. These robust cybersecurity measures help protect the integrity and confidentiality of sensitive financial data.

How CLA can help with audit preparation

Our industry-focused Client Accounting and Advisory Services (CAAS) professionals work alongside your institution’s team to offer specialized support tailored to the specific challenges of higher education. This collaboration allows your staff to focus more strategically on providing a quality education to students and adapting to the uncertainty surrounding the industry.

Contact us

Boost compliance and accuracy with outsourced audit services. Complete the form below to connect with CLA.