How to Prepare for a Change in Audit Firm

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Plan Ahead and Stress Communication

By Meagan Wellbrock, CPA

 

The term “successful audit” may seem like an odd word combination if your organization has reason to change audit firms. If the previous audit season did not go as smoothly as it should have you may be thinking of putting out a Request for Proposals for a new audit firm.

What does a successful audit look like? Your questions are answered by the auditors in a timely manner when you need the information, you are notified in advance of the schedules and documentation that your staff must provide to the auditors, and there are no surprises during the audit, among other factors. This is the minimum you should expect from your audit firm. Ideally, the auditors also will use the audit findings to provide insights into how you can improve internal controls and streamline your financial reporting.

If change is in the air and you want to be able to utter those words – “successful audit” – some key tactics should be included in your preparation:

  • Reach out early. Once you know the new audit firm you will be working with, don’t wait until the end of the year to discuss your issues and pain points with them. Communication is key to ensure that you and the new firm are in sync with what needs to be done.
  • Ask a lot of questions. You will receive a lot of questions from the new auditors and we recommend that you ask as many as you can, as well. This is a ramp-up time for both sides. If you have questions or concerns about the timing of the audit, the procedures and approach that the firm takes, the schedules and documentation that you and your staff will need to provide to the auditors, now is the time to ask.
  • Discuss the areas of struggle you had with the previous auditor and address them up front with the new one. Figure out what caused the stress so at audit time things will go more smoothly – and the auditors can get out of your hair!
  • Be aware that there will be differences in the way questions are asked and procedures completed by the new firm compared with the previous firm. The amount of questioning from the new auditor is necessary to gain an understanding of how your office runs.
  • Remember, an audit is not intended to find fraud. If you suspect fraud in your organization, a forensic evaluation by auditors with special training is critical.
  • Again – reach out. It all comes down to communication. Ask questions early in the process rather than waiting until the last minute. Your auditors would prefer to answer your questions throughout the year as issues arise versus dealing with them at the last minute during the audit.

Change is difficult and most finance professionals and organizations would prefer not to change audit firms if they don’t have to. The suggestions above can help alleviate some of the stress and worry that accompanies such a change.  For more information on changing auditors, contact ABBB.