Many businesses and non-profits are required to hire an accounting firm to conduct financial statement audits each year. If you’re one of them, have you partnered with the right auditor, or has your experience left you wanting more?
Your relationship with your auditor is essential to the long-term success of your company. That’s why it is essential that you choose an auditor who will not only deliver on the requirements of your audit, but one who will actually contribute to the growth of your business. The process of searching for an auditor can be overwhelming, but here are five important qualities to look for in your auditor:
- Provides Value Beyond Compliance
Yes, the main purpose of the audit is for compliance. But the best auditors go above and beyond the compliance aspects of their audits to provide valuable ideas for improvements in internal control, operating efficiency, and more. Recommendations are typically provided by the auditor through the preparation of a “management letter” summarizing the suggestions, which is then reviewed with your company’s executive team and/or Board of Directors. At RDHB, we make an extra effort to think outside of the box to provide value-added ideas that will help increase the profitability of your organization.
- Experience of the Fieldwork Accountant
The partner on your audit can be the smartest accountant in the world, but the truth is that the partner is often not all that involved in the actual audit. The most important person on the audit is the accountant who is parked in your office doing the audit fieldwork—in many cases, for a full week or more. If this person is not experienced, the result will be a poor and inefficient audit that can be intrusive to your staff. RDHB’s audits are always conducted by either a manager or director who has between 9-15 years of auditing experience. This is unusual, as most firms have entry-level professionals doing the bulk of the audit work.
- Experience in Your Industry
Does your auditor have experience in your particular industry? For example, if you are a non-profit organization or construction company, you have industry-specific accounting guidelines that must be followed. In order to ensure these guidelines are observed, you need to have an auditor who has expertise in your field. Our audit team at RDHB has experience in many industries, including non-profit, construction, manufacturing, broker dealers, employee benefit plans, and more. When you search for an auditor, make sure to ask prospective firms to provide the names of clients with whom they have worked in your industry.
- Effective Communication
Look for an auditor who communicates with you regularly during the entire auditing process—from the pre-audit planning, throughout the audit, and the post-audit wrap-up. In addition, make sure to meet with your auditor beforehand so you have the opportunity to provide insight on your controls, areas in which you would like them to dig more deeply, etc. Auditors should ask a lot of questions during the audit (or else they are not doing their job!). Lastly, you should meet with your auditor after the audit is complete to review the results of the audit, financial statements, management letter, audit adjustments, and more. At RDHB, we stress communication throughout the audit, and emphasize the importance of communicating with the executive team and/or management prior to the start and after completion of the audit.
- Exceptional Reputation
You want a firm with a well-recognized name in the community that conducts audits with similarly sized organizations. Always request references to other clients for which the accounting firm conducts audits—particularly those in your industry.
RDHB is well respected in Western New York. The firm was named one of Rochester Business Journal’s Top 100 Companies in 2016, and three of its partners have been awarded the “40 Under 40” distinction. All of the firm’s partners are active in giving back to the community, including serving on the boards of several local non-profit organizations. If you have questions about how to choose the right auditor or would like more information about RDHB’s auditing services, contact Tim Hern at email@example.com.