Your auditor plays an important role in giving people confidence in your organisation’s financial reporting.
Choosing a firm that understands your organisation can help you build a strong working relationship. It also needs the expertise to carry out an independent audit as your needs change.
Allen Audit & Advisory Principal Richard Allen explains what boards and management teams should consider when choosing an auditor.
Understanding auditor independence
An auditor must be able to assess your financial information objectively.
Many accounting firms offer audit alongside services such as accounting and tax. An audit-only firm focuses on independent audit and assurance.
Richard says it’s worth understanding how a firm manages its independence. “When a firm provides other financial services to an audit client, there can be additional independence considerations that need to be carefully managed,” he says.
“An audit-only firm provides a clear separation. Our priority is to independently assess the information presented to us and provide assurance over it.”
An audit-only firm also focuses its investment on audit expertise. “We can continually invest in our audit methods and training to help our clients receive quality audits,” Richard says.
Finding an auditor with relevant sector experience
An auditor who works with organisations like yours is more likely to understand your reporting requirements.
For example, a school may have different funding arrangements from an aged care provider. These differences affect what an auditor needs to consider.
Richard says relevant experience can help an auditor focus on the areas that need attention.“An auditor might have strong technical skills, but if they don’t understand your sector, there can be a significant learning curve,” he says.
“An auditor who has experience with similar organisations understands the common risks and reporting requirements. This allows the audit to be more focused.”
That experience can also help auditors identify issues earlier and make recommendations that suit your organisation. “It helps us know what questions to ask and where issues commonly arise,” Richard says.
Access to senior staff and support with findings
Ask who will lead your audit and how much access you will have to senior staff. You should know who to contact when a question arises and how significant findings will be discussed with your board or management team.
At Allen Audit & Advisory, access to senior staff is an important part of the service. “The team takes time to explain audit findings and discuss practical recommendations that suit your organisation,” Richard says.
“This helps you understand why an issue matters and what steps you can take to address it.”
It’s also worth asking how the firm will plan the audit around your reporting deadlines. Confirm it has the capacity to complete the work within the agreed timeframe.
Planning for auditor rotation
Some organisations are required to change the individual leading their audit after a set period. The requirements depend on the organisation.
Richard says a firm with more than one registered auditor can offer greater flexibility when a change is needed. “If you have a strong relationship with your audit firm, changing the individual auditor shouldn’t necessarily mean having to start again with an entirely new firm,” he says.
“Having multiple registered auditors allows us to bring a fresh perspective to the audit while retaining the firm’s understanding of the organisation.”
Where the rules allow, this can help an organisation keep its existing audit firm when the individual leading the audit changes.
Understanding the audit fee
A clear proposal should explain what the audit covers and how the fee is calculated. Ask what is included and whether any work could attract an additional charge. The fee should allow enough time for a thorough audit.
Allen Audit & Advisory offers fixed pricing, giving clients clarity about the agreed audit fee from the outset.
Finding the right auditor for your organisation
Before appointing an auditor, check that they hold the qualifications and registration required for your audit. Ask how the firm would support your organisation as its needs change.
“Ultimately, you want an auditor who understands your sector and has the independence to provide objective assurance,” Richard says.
“Choosing the right auditor from the outset can help build a strong working relationship that serves the organisation and its stakeholders over the long term.”
If you’re choosing a new auditor or reviewing your current arrangements, contact Allen Audit & Advisory on 07 5503 1709 or email info@allenaudit.com.au.
