3 Common Audit Fears and How to Overcome Them

Image

If the thought of an upcoming financial audit sends you into a panic, you’re not alone. Many childcare business owners feel fear and frustration when facing an external audit. In the following guide, we explore three common audit fears and how to overcome them. 

Reframing the External Audit

The key to overcoming fear and frustration when facing an external audit is learning how to reframe a negative into a positive. We’ll see how each of the following common audit-related fears can be rescripted with a new narrative in order to reframe the entire audit experience. Check it out below. 

Common Fear #1 – Fear of what the audit will cost in time, personnel, and resources

It’s true that an external audit comes with a significant cost of financial, logistical, and time resources for the auditee. This fact can cause many childcare business owners to stress about the audit ahead of time. How can you flip the script on this common fear?

One way to reframe the negative thinking (“This audit is going to cost my organization too much”) into positive thinking is to consider what the audit’s payoff will be instead of focusing only on the cost. For example, consider what knowledge, insight, and professional recommendations may be gained from the auditors into your organization’s management, administration, and internal controls. Thinking about what you stand to gain instead of worrying about what you may lose can be extremely helpful when it comes to putting audit fear and frustration to rest. 

Another way to head off negative thinking is to take some preventative measures by preparing ahead of time. While an external audit will certainly cost your organization in time, personnel, and resources, it will not cost you as much if you take the necessary steps to prepare ahead of time. You can read about tips for preparing for an upcoming audit here. (Link to “10 Ways to Prepare for an External Audit”)

Common Fear #2 – Fear of the known 

It’s also common knowledge that the auditor’s purpose is to closely examine your organization’s internal controls, financial statements, and supporting documentation, and to form an opinion on the authenticity and accuracy of all financial reporting and processes. Many business owners have a fear of what they already know; namely, that an audit will mean close scrutiny with government auditing standards in mind. However, this fear can be turned into a positive by viewing the audit as an opportunity to learn about weaknesses, address findings, tighten controls, align with industry standards, and bring your childcare business back into compliance with federal and state laws and regulations. 

Common Fear #3 – Fear of the unknown 

A third common fear is the fear of the unknown, or what the audit may reveal to management, staff, and the public about the childcare organization. When problems aren’t identified and information isn’t validated, it’s easier for the organization to assume financial reports are accurate, internal controls are efficient and accurate, and there are no underlying issues needing to be addressed. Once the possibility of an audit is introduced, management may fear having to face findings that were there all along, but which may have been “swept under the rug” up until now. Whether many serious findings are produced from the audit, or several smaller issues are identified, not knowing exactly what reg flags may come up can be stressful. Again, viewing the audit as an opportunity for improvement instead of a fault-finding investigation can help business owners change the fear-based narrative into something much more positive. 

Here at Honest Buck, we understand that external audits can feel overwhelming. That’s why our Yellow Book audit services are especially designed for busy childcare business owners like you who are looking for guidance from the experts and desire a smooth audit process for all. Contact us today to schedule your free consultation. 


Share this article