What are the key factors for choosing an auditor for your business?
Reliable information is the basic prerequisite for confidence in the value of an organisation; for investors, the public and the organisation itself. A conscientious independent audit of an organisation’s financial report provides the basis for this confidence.
HOW TO CHOOSE THE RIGHT AUDIT PARTNER
Choose the right team
Experience, qualifications and knowledge are essential, along with a clear understanding of the client’s business and objectives. Ideally the audit staff should have experience in the company’s particular industry to enable them to clearly understand the challenges and market conditions in which the client operates. It’s important to make sure you have the right person or team in place and then develop a strong, trust-based relationship with them. Only then can you get the value you expect from your audit process.
Set clear parameters for the scope of work, including communication
It’s essential to identify the areas or entities to be audited, how they should be evaluated and what company policies or legal requirements govern their financial management. It can also be helpful to set a work schedule with agreed timeframes at this point.
Ensure a holistic view of the audit process
It is important to take a holistic approach to the report. It should be integrated and include items like a carbon audit, probity assessment etc. As the international investment community becomes more sophisticated the audit report must reflect the importance of contextualising the information to give investors assurance beyond a simple financial position.
The main role of the auditor has always been to review the company’s financial performance, looking at things like profit/loss statements and other financial disclosure documents. However, in the course of doing that, an experienced auditor will look at internal systems and policies so that they can provide feedback across those areas.
AVOID THE PITFALLS
Some of the typical pitfalls in the audit process include:
• too much of a focus on simple compliance and not enough focus on business outcomes
• inadequate communication between the audit team and the board
• inadequate planning and scoping of the audit
• not enough support for the audit process from the board.
A successful audit is one that takes place with clear communication and cooperation, enabling the internal and external audit teams to work together for the best outcome.
The audit report itself should deliver accurate, unvarnished information and a clear set of sensible recommendations.
It is important for organisations to continue to demand value from their audit partners while providing them with the information and access they need to do their job accurately and independently.