Preparing for the annual financial statement audit can feel overwhelming for public sector entities, particularly for finance teams balancing daily operations, compliance requirements, and reporting deadlines. Audit preparation can often be treated as a year-end event rather than a year-round process. To help reduce year-end stress and strengthen financial data quality, documentation readiness, and communication with auditors, government finance teams can break audit preparation into manageable tasks throughout the year.
Through polling questions during our webinar, “Trial Balance to Audit Opinion: A Guide to Audit Readiness,” we had more than 1,000 attendees share with us the importance of having clear, current, and actively used policies and procedures as part of the year-round process. This article will reflect on the responses to our four polling questions.
1. What Does Your Audit Prep Timeline Really Look Like?
While we would all like audit preparation to be a calm, well-prepared event, the reality is that it is still more reactive than proactive.
A large portion of respondents (40%) indicated they are still in “scramble mode” a few months before the audit, while a similarly sized 38% reported maintaining audit readiness throughout the year. This suggests many public sector entities continue to treat audit preparation as a seasonal effort rather than an ongoing process.
Our Takeaway: Public sector entities recognize the value of year-round audit readiness, but many haven’t yet established the processes, staffing, or discipline needed to sustain it.
2. Which Year-End Gremlin Steals the Most of Your Time?
When asked about year-end pain points, about one-third of respondents identified capital assets and construction-in-progress (CIP) activities as their biggest time drains. Grants, compliance reporting, reconciliations, and pension/other post-employment benefits (OPEB) information also ranked among the leading challenges.
Our Takeaway: The most time-consuming audit activities are often the most complex and documentation heavy. Capital asset management remains one of the most persistent challenges for accounting and finance teams, highlighting the importance of proactive planning, accurate record-keeping, and continual monitoring throughout the year.
3. How Does Your Annual Report Actually Come Together?
Half of respondents said they maintain annual report materials in shared folders that are updated throughout the year. This approach significantly outpaced more informal methods or a reliance on just one individual.
Our Takeaway: Public sector entities are increasingly embracing collaborative, centralized documentation practices to support financial reporting and audit preparedness. This suggests that accounting and finance teams see value in creating a single source of truth, reducing last-minute document gathering and improving institutional knowledge.
4. If We Could Hand You One Thing Tomorrow, What Would You Grab?
The top-requested improvement was faster responses from other departments (36%), followed closely by the need for additional support during close (31%). Respondents also cited a desire for stronger policies and procedures (23%). It seems that the people and process challenges often outweigh the need to have someone else create the Annual Comprehensive Financial Report (ACFR).
Our Takeaway: Many audit challenges are not accounting issues. They are coordination and resource issues. Delayed information from departments and limited staff capacity continue to slow the close and audit process, putting extra pressure on accounting and finance teams if preparation is held off until year-end.
Our Key Takeaways
Audit Readiness Is a Year-Round Effort
Public sector entities that maintain documentation, reconciliations, and supporting schedules throughout the year are often better positioned to navigate audits efficiently and meet reporting deadlines.
Tackle Larger & Time-Consuming Sections in Small Pieces
Completing sections such as capital assets, CIP, grants, compliance reporting, and pension/OPEB by consistent work throughout the year can help reduce last-minute pain points.
Shared Documentation Is Becoming the Standard
Centralized documentation helps improve audit readiness, reduces last-minute effort, and strengthens institutional knowledge and cross-training opportunities.
Audit Success Requires Collaboration
Improved communication and coordination between departments along with external support can help to address many audit challenges.
How Forvis Mazars Can Help
Forvis Mazars supports public sector entities throughout this journey through our Government Outsourced Accounting Services, providing scalable accounting and financial reporting support, as well as The Reporting Solution (TRS), our ACFR preparation software designed to streamline reporting, improve accuracy, and help public sector entities meet deadlines.
Our public sector team can help governmental entities enhance audit readiness, strengthen compliance, and achieve reporting outcomes. For more insights, explore our Public Sector Priorities. If you have any questions or need assistance, please reach out to a professional at Forvis Mazars.