Audit Survival

By Cherry, Jonathan M.; Labarta, Margarita M. | Behavioral Healthcare, July 2007 | Go to article overview

Audit Survival

Cherry, Jonathan M., Labarta, Margarita M., Behavioral Healthcare

A look at seven characteristics of organizations well-prepared for audits

We all have experienced many kinds of audits m our tenures in bchavioral Healthcare: financial audits, workers' comp audits, 1RS audits, accreditation audits, and on and on ad nauseam. There are many ways to survive an audit, some serious and some more whimsical; sometimes our judgment has been so impaired that we do not survive.

I (J.M.C.) will never forget an experience I had 33 years ago as a young auditor with Arthur Anderson. My companions and I were auditing a large paper mill in a small southern town. We were given a small, non-air-conditioned office to work in, and as we got closer and closer to discovering a serious problem with the wood chip inventory, we were sent on several wild goose chases by management around a hot, dangerous manufacturing plant. Wc persevered and ultimately required a million-dollar adjustment to write down the wood chip inventory, as the core of the chip pile was so large that spontaneous combustion was occurring and rendering the chips unusable.

While audits in behavioral healthcare may not involve such colorful characters, audits are very important management tools, which may be used in a variety of ways to help management implement best practices and the latest in science-based technology from the accounting field.

Since audits are inevitable, and even potentially beneficial to an organization, we all should seek definable characteristics of well-run organizations that enable them to successfully undergo audits; that is, to "survive" them with minimal disruption and end up with a "clean" audit report. We think seven characteristics and related best practices reflect such management excellence. They can be summarized as follows:

The organization engages in meaningful, long-range planning. We muse set time aside to engage our staff in meaningful, long-range planning. Successful strategic planning will result in a healthier organization with goals and objectives that will strengthen the agency's ability to achieve its mission. A healthy organization living its mission is much more likely to have successful audits of all kinds. Strategic planning is critical but often difficult to accomplish organization-wide.

The chief financial officer is a certified public accountant. While many organizations have done well with non-CPAs at the helm of their finance departments, the odds are better with a CPA, especially one who previously has done audit work. A CPA with this background has the knowledge and training to research and understand the myriad of announcements, guidelines, laws, rules, and regulations that govern audits.

Furthermore, an experienced CPA will understand the audit process as an insider and can help the organization be well prepared for the process. This background can substantially increase the CFO's effectiveness. The CFO must share this information with other key management personnel, especially the executive director/CEO who, in most behavioral healthcare organizations, is less likely to have a financial background.

The accounting staff is competent. The backbone of a successful accounting department is adherence to accounting principles and proper internal controls. As with our clinical departments, a caring, competent accounting staff is a necessity if we want a good audit outcome.

We all have had the experience of hiring staff who are caring and "nice" but not competent. In the accounting department, this could lead to audit disaster-or worse. Competent accounting departmentstaffwill provide accurate and timely monthly and year-to-date financial reports. Competent accounting staff also ensure the existence, orderliness, and proper maintenance of financial records, documents, and processes. Such a staff is capable of assessing the management team's needs and presenting information to auditors that conveys the organization's adherence to its mission and objectives within the guidelines of sound financial practice. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)


1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited article

Audit Survival


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.