Choosing the right auditor is one of the most critical decisions your leadership team will make. A poor choice can lead to regulatory issues, missed opportunities, and wasted time. To help you navigate this high-stakes, time-consuming process, Calvetti Ferguson has compiled these key considerations to ensure you find a reliable and strategic partner.
Auditor Independence, Integrity, and Ethical Standards
The most fundamental, yet valuable, quality of an auditor is their integrity. Auditors should act with objectivity, impartiality, and professional skepticism to provide a true outsider’s perspective and opinion on the accuracy of financial statements. An auditor’s integrity, independence, and adherence to ethical standards are crucial to the overall credibility of an audit, which has been shown to reduce a company’s risk to investors.
Industry-Specific Experience & Qualifications
An often-overlooked quality of a good auditor is their former industry experience as controllers or chief financial officers. Auditors who have real-world experience in business outside of their public accounting careers have a better understanding of your challenges and concerns because they have sat on the same side of the table as you. They already understand how business works and your industry’s jargon, acronyms, and other nuances, so you can focus on your day job while they conduct the audit.
Additionally, finding an auditor who specializes in companies like yours brings added knowledge and expertise to the table. As the auditor observes the challenges other companies in your industry are facing and works with their clients to address those challenges, they bring different perspectives to bear on the issues at hand.
Tangible Questions to Ask
- How many clients in the _____ industry have you worked with?
- Do you have any _____ audit referrals?
- What problems have other clients of yours in the _____ industry dealt with in recent years and how have you helped?
- What industry focus does the audit team have?
Auditor Communication, Availability, and Client Compatibility
An audit requires much collaboration and communication to be successful, so it is essential to have a good working relationship and a sense of compatibility with the auditor. Having a mutual give-and-take relationship is especially necessary when discrepancies arise, allowing for meaningful conversations and valuing both perspectives.
Beyond the compatibility between the two groups, having an auditor who is available, responsive, and communicative is crucial for effectively answering questions and addressing concerns. Audits require numerous engaging conversations, especially during the initial stages and finalization. An auditor with a plan for communication and tools that facilitate the secure, timely, and convenient sharing of information is crucial for the audit’s efficiency and timeliness.
This communication does not start or stop with fieldwork. A good auditor will meet with you regularly to keep up with current developments in your business and to discuss things going on in business and accounting that are relevant to you.
Tangible Questions to Ask
- Do you have a communication plan? What applications do you use for communication?
- What is the general timeframe in which to expect a response?
- What is your typical flow of communication with clients throughout an audit?
- In past engagements, how have you communicated any discrepancies or problems that have arisen?
- How often do you meet with clients?
Beyond Compliance: The Value of a Strategic Audit Partner
There is a significant difference between a team that views itself as merely a service provider and one that perceives itself as a strategic partner with a valuable perspective for organizational improvement. Their objective, independent perspective, combined with industry understanding and experience, puts them in a position to identify the strengths, weaknesses, opportunities, and threats facing the organization that might not be as visible to internal management.
At Calvetti Ferguson, we are more than your auditor. We act as trusted business advisors…
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