Five considerations for switching auditors
ARTICLE | June 24, 2022
Authored by RSM US LLP
As a growing business, your needs—and relationships—shift with time and circumstances. Along with this natural evolution, your auditing needs may change, too. Sometimes it is readily apparent that you have outgrown your auditor’s capabilities, and sometimes there are a few more subtle signs that signal it’s time to reevaluate the relationship.
Here are five considerations for switching auditors:
Your business is growing, and your needs are changing
Congratulations! Your business is growing and thriving. If you are expanding your offerings or growing your geographic footprint, do you have the support you need for your increasingly complex and specialized audit needs?
An auditor with more resources, deeper technical knowledge, greater capacity and wider geographic reach may better serve the volume, timing and complexity of your needs. For example, as you expand, an auditor who can better service different geographical locations or provide industry-specific technical knowledge may be needed.
You want the attention and service your business requires
While you want an auditor with the breadth and depth of services to support your business objectives, how these services are delivered matters. You should consider how the audit firm customizes its services to your business needs. For example, if you experience frequent turnover with your engagement team or a lack of adequate attention, it may be another indicator that it is time to move on.
Engaging a firm equipped to respond to your needs quickly, with individuals willing to have open and frank discussions, will set a solid foundation for an effective and efficient audit. Look for an audit firm that makes its leaders accessible so that you can tap into their deep industry knowledge and experience.
You want more communication
Trust, honesty and open two-way dialogue with your engagement team are vital. Audit services are essential to your business, and being able to address sometimes difficult issues openly and honestly is an important part of the audit process.
A strong relationship means that your audit team, with the requisite skills and knowledge, sufficiently understands your business and your industry. Auditors cannot effectively audit what they do not know. The right auditor wants to get to know your business—and takes the time to do so. The right team also understands the financial reporting requirements that are applicable to you and your industry and can clearly communicate any changes that are relevant for you.
You want to be sure your auditor is providing value
Making a reasonable assessment of the value you are getting from your auditor’s services will help determine when the time is right to make a change—you do not want to switch auditors solely because of fees. Firms that invest in technology and the right technical skills to service clients come with commensurate costs.
Ask questions to understand and assess the value behind the fees.
Your confidence in the quality of the audit process needs a boost
Confidence in reliable financial information is fundamental to your business, especially as your business grows and becomes more complex. The quality of an audit that provides confidence to users of financial statements is built on integrity, competence, objectivity and independence. Audit quality indicators are many, and include the following:
- Quality of the audit firm: Does the firm disclose the system of quality control it uses to support audit quality? Does it have the resources and geographical reach needed to meet your business’s needs? Do its processes help avoid surprises, detect issues early and complete the audit in a timely manner?
- Quality of the engagement team services: Does the engagement team have the necessary skills, industry expertise and resources? Does the team use technology and data analytics to identify risks? Does it add valuable human insights to supplement the technology?
- Communication and interaction: Are members of the engagement team willing to have frank, open and thorough discussions with you? Are accounting and auditing issues explained in easy-to-understand language? Do you have frequent interactions with engagement leadership and access to firm experts when needed? Does the engagement partner provide insights related to the processes and internal controls of your business, including those related to management’s actions?
- Auditor independence and objectivity: Does the auditor have processes to provide reasonable assurance that its personnel comply with the relevant independence requirements? If there are differences in views between your management and the auditor, would the engagement partner quickly and professionally facilitate a discussion that clearly presents your views and the firm’s views? Does the auditor stress the use of both professional judgment and professional skepticism in conducting the audit?
Make the right switch
The considerations for how the right audit firm can meet your needs as you grow are unique for each business.
An audit firm with deep and broad experience suited to your business will be the right fit. A quality audit by an attentive firm can form a vital foundation that will continue to provide confidence in your financial information as your business grows and thrives. With a national or international footprint, the right audit firm can provide audit services for your expanding geographic footprint.
The right firm also will know when and how to apply the appropriate technology resources to provide a high-value, quality audit experience. Its professionals will understand your type of business, know the industry well and use that knowledge to translate information into valuable and actionable insights.
The right audit firm serves businesses like yours. A firm that will focus on attention, responsive service and the trusted relationship your business needs is the right firm for you.
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This article was written by RSM US LLP and originally appeared on Jun 24, 2022.
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