A common misconception shared amongst small and family-owned businesses is that an audit is just an added burden required to satisfy administrative compliance regulations. However, this should not be the case and the audit process should be able to deliver much more than that. The right auditor should be able to add value to your business. We've come up with some requirements firms should take into consideration prior to engaging their auditor.
Things to look out for
1. Industry Experience
No-one knows your business as much as you do. However, your appointed auditor should be versatile enough and holds valuable industry insights. An auditor with such knowledge means that the engagement will be more efficient as less time will be spent on generic questions. Furthermore, the auditor will be able to bring a wealth of industry knowledge which will eventually help boast your business.
2. Experienced staff
Having experienced staff as part of the audit engagement team compliments the above. A stable audit firm is one with few staff turnover. In turn this gives stability to your assigned audit engagement team. There is nothing more annoying than having to repeat the same understanding to new audit engagement teams year on year. Staff continuity will also translate into having a more efficient audit.
3. Audit Planning
While on the lookout to engage your auditor, do ask questions on how the auditors plan to carry out the engagement and seek to be part of such planning process. This will not only help you and your firm to have an efficient audit, but it will also help you determine the knowledge held by the auditor.
For firms and individuals to be able to conduct statutory audits, they have to undergo through a thorough process which involves having years of experience within the profession and a number of University qualifications. Only limited firms and individuals are authorised to carry out audit engagements accepted by the authorities. When selecting your auditor, do make sure that firm is authorised to do so by checking out the relevant registers. In Malta, this can be easily verified by viewing the accountancy board's register. Ours can be found here.
While the cost of implementing the latest technology within audit firms is a costly process, this should not be a deterrent not to do so. An audit firm which refuses to stay up-to-date with the latest technology is putting their clients at a disadvantage. The use of technology allows for a much more efficient audit engagement and provides valuable insights from data crunching which otherwise you as a client would miss out on. The quicker auditors are able to find anomalies means that they can instead allocate their resources in carrying out valuable analysis which in return will undoubtedly lead to added value for your business.
Having a good reputation is such an essential perquisite for auditors that many of our code of ethics state that an auditor should always act in such a way as to not bring bad reputation to the profession. Yet, time and time again, cases emerge which show that audit firms where at the centre of scandals, both locally and on an international scale. Having an auditor with a poor or bad reputation drastically impacts you as a client. So, when it comes to picking your auditor, do analyse their reputation and question their methodology to help determine whether or not there should be causes for concern.
7. Continuous support
Good auditors are those which can also provide you with additional support throughout the year and is able to bring matters to your attention which would otherwise go unnoticed. Most of the decision making done within small and family-owned businesses require prompt professional support which can only be provided if your auditor knows your business and your company.
8. Audit Fees
It is often said that the devil is in the details. When agreeing the fees for the audit engagement do make sure to understand the mechanism involved in determining the audit fees and confirm that there are no unusual penalties or extra charges. While it is expected that you get what you pay for, an expensive fee does not necessary implies that an outstanding service will be delivered. On the other hand, unreasonably cheap fees should be initial indicators to question the service which will be provided. Hence, do make sure that you know what you are getting as much as possible from beforehand.
The next time you are selecting your auditor, do keep all of these in mind. At Borg Galea & Associates we strive to do much more than rubber stamping your figures. Our aim is to be an essential business partner for you and your firm and we ensure that we are always there to provide you with the necessary support and deep business insights which will shape your organisations future.