Seven Signs of Audit Integrity
The difference between good and great. We can usually tell the difference. And likewise it is in the corporate audit world. A good auditor can rattle off the accounting policies and quality control standards. A great auditor will use these to advocate for the success of your firm. But coming into an audit can be very intimidating and auspicious.
If you are the CEO, CFO or on the audit committee and you need a refresher of what to look for in audit integrity or a newbie to the process here is a list of some high points to consider:
1.Which accountants will work directly with me?
Have you met the audit team? Do you have a bio sheet on each and everyone of them? Have you seen them face to face? Getting to know your audit team is critical in not only having a successful audit but establishing a mood of “esprit de corp” through the process. Investing in people(building relationships) and the process can greatly increase your bottom line.
2. Added value.
I’ve heard it once said “everyone has a sign around their neck saying make me feel important.”
It is no different in the corporate audit world. And everyone wants to know what you bring to the table. What do you have that brings value to us? A valid point that is always at the forefront of every relationship.
Billing rates, startup costs, service, and all ancillary costs are all part of the deal. Make sure you know them. All firms should include these in the proposal. And if they don’t do not be sheepish n your request for them. Also, once again, building relationships can strengthen future savings when fees for the audit firm increase.
4. Are you peer-reviewed?
A firm’s participation in the peer-review process is another factor in the reliability equation. Licensed certified public accounting firms must be peer-reviewed once every three years. Check the website of your state’s society of CPAs to find out if the firm has been registered.
5. Who is your typical client?
This should be more specific than a general industry category. Diversity is good. And something that should be more sought after. However, logically, it stands to reason that there will be natural tendency to lean toward one sector or another based on audit experience.
6. Size of firm?
A firm might not have enough CPAs to serve you efficiently if unlicensed professionals are doing much of the work. Firms with at least five CPAs are sufficient for most private companies. But efficacy of a firm is not the sum of its parts alone. Smaller firms are often times bring more value to the table as their fees are lower and their focus is more on doing a great job…… kind of like an underdog in a fight! They work with heart and are not so much part of the big machine.
7. When can we connect?
A good working relationship starts with a good first impression. Any firm that is worth its weight will go to great lengths to ensure that their best foot is put forward. There should be much interface in the beginning. Asking for a meeting or two will help in the stabilization of the relationship. And any audit firm knows this and invites this type of behavior. Make sure you take the time to meet with them and discuss your cares and concerns before you make your decision. A 15 or 30 minute conversation and secure the right firm.
The nuts and bolts of the whole thing:
All of the above mentioned are just some of the things to look for whenmake the decision as to which audit firm. Of course, the obvious reasonis to hire an organization to protect your best interest as a companyand protect and hopefully increase your bottom line. Of course, eachcompany has other features that, if asked they are more than happy toshare. But leading with these questions will not only guide theconversation in the right direction but will also reveal the integrityof the team. And that is truly what is at stake. The integrity of theaudit team. And with these guidelines, you will be able to know fullwell the audit integrity of your choice.