Between holiday preparations, wrapping up construction projects, and preparing for year-end, year-end is a busy time for companies. This article will provide a reminder of year-end duties that professionals at Forvis Mazars recommend telecommunication companies consider to help ease the year-end and audit preparation processes.
- Understand any audit requirements and deadlines. There are several reasons a company may be required to have an audit, including regulatory requirements, loan covenants, company bylaws, and more. It is important to review these applicable guidelines to understand what attest procedures are required (audit, review, compilation, etc.), and when they are due, to help ensure your company remains in compliance.
- Evaluate the status of ongoing construction projects and related grant funds. As construction slows for the winter, evaluate the status of construction projects to determine which projects should be closed for year-end. If your company has been awarded grant funds related to construction projects, this is a good time to review the grant agreements to be sure the company complies with all grant requirements. During this process, the company can also determine if it has met the criteria to request any of the grant funds.
- Prepare for the audit. Discuss audit timing and expectations with your audit team to be sure everyone is aware of when preliminary work and fieldwork will be completed. The auditors will also want various documentation so that the company can begin gathering prior to year-end. These items may include board minutes, loan agreements, lease agreements, company policies, and any other documents that pertain to significant financial events during the year.
- Complete year-end reconciliations. There are many potential year-end reconciliations that need to be completed to help ensure accurate financial reporting internally and for the auditors. Some of these key reconciliations may include cash, investments, receivables, inventory, liabilities, and depreciation expense. While completing these reconciliations, the company can also gather underlying records that support the calculations.
- Review internal financial statements for reasonableness. Once year-end reconciliations are completed, a review of internal financial statements should be done to identify any potential misstatements. For example, does the change in internet revenue between current year and prior year seem reasonable compared to changes in customer counts and/or rates? Does payroll expense align with given raises and changes in employee counts? Does an increase in inventory align with a significant purchase near year-end? Asking these types of questions can also help the company prepare for any questions the board and/or auditors may ask.
Planning for year-end can help the closing and audit processes run smoother, which can alleviate stress on your team. If you have questions or need assistance, reach out to a professional at Forvis Mazars. To stay up to date on industry changes and other telecommunications topics, visit our Telecommunications page.