Meet with your prospective audit team as part of the due-diligence process. Validate their approach by asking for key quality indicators of an audit and run some scenarios by them to help with your understanding. Also, seek to understand their holistic approach to audit quality, as QC partners coming late in the process can trigger audit delays. This will help mitigate challenges from surprise issues, cumbersome information exchange and lack of communication. Management and audit committee members should ensure they are aligned on any changes in approach, timeliness and access they seek regarding the new firm. Understand Their ApproachĪ new auditor can bring a fresh take on a technical issue, deeper industry or business understanding and greater access to global resources. Be careful to assess personalities in addition to technical skills. Accepting a core team blindly is always risky since there are good and bad teams within audit firms – especially taking into consideration the fit of industries, size and governance structures. Get to Know the Core Teamĭo not hire an audit team without first getting to know the proposed audit partner and senior audit manager. Here are some steps to help ensure a smooth transition.Ĭhanging Audit Firms: 7 Steps for a More Streamlined Transition 1. The transition process can be smoothed with a vetting process to identify the right firm, people, processes and technology to meet your needs in the way of seamless onboarding. Whether you’re looking for a new perspective, enhanced access to resources or greater responsiveness, it is important to prioritize the transition of audit firms and not take anything for granted. Nevertheless, developing a new auditor relationship can be a daunting task. While there are several different perspectives on the pros and cons of changing audit firms, changing audit firms is a process that many companies undergo at some point. Their analysis also shows that companies with a higher revenue are more likely to retain their audit firm for longer time periods. Was your annual audit or quarterly filing process with the SEC more painful than usual? Did you hear more about petty issues rather than meaningful insights? Did you have to reorient a new team of auditors just like last year? There are a multitude of reasons to consider a change, including simply seeking a new independent perspective.Īccording to Nicole Hallas of Audit Analytics, companies tend to stick with their audit firm for an average duration of 15 years. Ron Kral describes steps you can take to mitigate them. Most companies change audit firms eventually, but the process isn’t easy and can present many challenges during and after the fact.
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