A company should insist on specific qualities and characteristics from the auditor it chooses to ensure that its accounting and reporting arms are working properly. To guarantee that the audit process goes smoothly, we’ve listed four must-have features when it comes time to consider the auditor selection process.
The expertise of an audit firm is critical to a successful audit. Audit firms that can showcase significant experience performing a range of external audits generally bring higher quality, more efficiency, and less disruption to your team. Experienced auditors should also be aware of any new standards. Therefore, a company should ask the audit firm general questions, such as:
- How many audits does the firm (and the engagement partner) perform every year?
- What does the firm’s initial audit or transition between auditors encompass?
Having expertise in a given industry or regulatory framework can allow an auditor to efficiently provide value-added insights, such as practical information regarding upcoming standards, regulations, and industry trends. This valuable feedback allows management to address any changes proactively.
Because some industries and regulations have particularly rigid guidelines, the audit firm’s experience in these areas is paramount. They include (but are not limited to):
- employee benefit plans,
- financial institutions (including the Federal Deposit Insurance Corporation Improvement Act, or the FDICIA), and
- public company audits.
Asking the following questions may help determine if the audit firm’s experience will be a success:
- How many audit clients specific to that industry or specialty area does the firm have?
- Of what related organizations is the firm an active member? How do these memberships help the firm maintain its expertise?
Your Auditor Should Understand the Ins and Outs of Your Business
A smooth audit requires planning. Auditors and management should meet to discuss overall timeframes and deadlines for preliminary work, fieldwork, testing, and submitting reports and other deliverables to stakeholders. Additionally, both the audit team and management should fully understand their responsibilities.
Paying attention to timing and regularly checking to ensure everything is working properly is critical – knowing the status of the audit, especially when there are potential issues, is essential. Consider the following questions to gauge an audit team’s communication abilities:
- Have the auditors indicated that more information is needed?
- Did they express that they may need to change tactics to test certain areas?
- Have they identified any issues with the audit?
- When, if ever, have they proactively notified a client of potential large-scale problems?
Auditors who clearly communicate the progress of an audit can help management avoid anything possibly going wrong during the audit.
Every Auditor has Their Secret Tricks
When it comes to an audit process, if a company is unprepared they can really feel the heat. By contrast, some companies work with auditors who provide valuable insights for improvement. Professional standards require auditors to understand their clients’ key business processes and related internal controls so that they can evaluate any material gaps or deficient controls. Consequently, companies should likely receive improvement points and recommendations for best industry practices as part of the audit.
Technology-Enabled Audit Takes the Cake
Technology can help make many processes more efficient. For that reason, some organizations have fully embraced technology (e.g., operating primarily in the cloud) while others still use paper files and physical storage cabinets. Accounting firms should be able to scale up or down with their own technology to meet their clients’ needs. Clients who maintain all of their information electronically may benefit from a firm that can communicate and perform the audit virtually or with advanced computer-assisted auditing techniques.
An Audit Firm There to Make Your Audit Process Simple
CRI’s audit team blends technical audit experience, industry-specific expertise, communication skills, and technology to perform audits as efficiently as possible. The CRI virtual Smart Tech Audits & Reviews (vSTAR) ™ process allows us to perform all or part of our audit virtually and in real-time, enabling clients to enjoy reduced travel costs for their external auditors. More importantly, we add value to our clients’ businesses that goes beyond audit compliance. Contact us today and let us show you how we can help can make your audit a little easier.