Was your annual audit or quarterly filing process painful? Did you hear more about issues, or did you access meaningful insights?
Whether you’re looking for new perspective, enhanced access to resources, or greater responsiveness, developing a new auditor relationship can seem like a daunting task.
However, the transition can be made simpler with a vetting process that identifies the right firm, people, processes and technology to meet your needs and ensure seamless onboarding.
Determine Priorities: A new auditor can bring a fresh take on a technical issue, deeper industry or business understanding, and greater access to global resources. Management and audit committee members should ensure they are aligned on any changes in approach or access they are looking for in a new firm. This will also help ensure buy-in from the board.
Maximize the Meeting: Meeting with your prospective audit team can help gauge accessibility, responsiveness, service approach, and the depth and breadth of resources they offer. It’s the time to be candid about what wasn’t working with your previous auditor, and what the goals and expectations are for your business and the relationship. The more open you are, the more quickly a new auditor can onboard.
Understand Audit Methodology: To mitigate challenges from surprise issues, cumbersome information exchange and lack of communication, companies should seek to understand the prospective auditor’s holistic approach to audit quality. This can include how they will access information, and whether they have a milestone or a continuous audit approach, to avoid last-minute issues. Validate their approach by asking for key audit quality indicators and proof points.
Test Technology: Innovation in audit process and technology can help companies create more efficiencies and transparency. Companies should make sure that onboarding to a new auditor’s client portal will be both secure and user-friendly to avoid tech-related headaches. Your client portal should be a one-stop shop for project status, resources and insight. Ask for a demo to make sure the platform will meet your needs.
Disclose Decision: For public companies transitioning auditors, the SEC requires an 8-K disclosure within days of the decision. It is a best practice to have full transparency with your stakeholders on the basis for the change and to share your audit committee’s approval.
Get Started: Ensure open lines of communication so your new auditor can ask the right questions, and access required data to get started immediately. Work with your new partner to determine the right cadence for in-person meetings and informal check-ins to stay on track.
Copyright © 2021 BDO USA, LLP. All rights reserved. www.bdo.com
Concannon Miller is an independent member of the BDO Alliance USA, a nationwide association of independently owned local and regional accounting, consulting and service firms with similar client service goals. Learn more here.