As you know by now, audits are complex and challenging processes that should not be undertaken lightly. When you hire an auditor to perform an audit of your organization, you’re essentially trusting them with keeping your sensitive financial information out of the wrong hands.
To protect yourself and your organization from Audit risk, ask these 5 questions of your audit firm before they even begin:
1. What subject areas will they audit? Are there any special requirements for these areas?
2. How many people will they audit in my division? Will they audit both small businesses and large corporations?
3. How many audits have they done in their current or prior business lives? Will they do more than one audit at a time?
4. Does the auditor work alone or with other auditors or firms within the same organization?
5. What percentage of my audits will the auditor complete during the course of his or her career?
This checklist of an audit is not intended to be all-inclusive, but rather to give you some insight into what to expect if you hire an auditor for the first time. If you have any additional questions about what to look for when hiring an auditor, feel free to reach out!
Auditing is an analytical process that entails inspecting documents, data, and/or financial data to determine whether they are accurate and complete. The audit function can be found in many different organizations, including government and non-profit organizations. In a government agency, it may be the accounting department that performs the audit. On the other hand, an accounting audit may be performed by an audit firm that specializes in this area. Auditing is not just about finding mistakes or inaccuracies.
It is about determining why the mistake or inaccuracy happened and how it could be avoided in the future. This is what makes auditing different from other types of inspections. Atypical inspections, also called non-disclosure inspections, are not subject to these rigorous examination processes. While each type of audit has unique requirements and considerations, the core elements that make up an audit remain the same for both.
An audit entails uncovering possible problems in your organization’s systems, policies, or procedures. The audit aims to identify weaknesses, inaccuracies, or omissions that may exist within your organization so that they can be properly corrected. The audit process also involves making three fundamental assumptions: - The accounting period is the most relevant time for which financial statements are recorded. - All assets and liabilities must be fair and reasonable as of the date of the statement. - All events and circumstances should be considered, including the impact of changes in circumstances and the need for modifying the accounting policies.
You want to find an auditor who has been through the process of audits many times. This is because each audit has unique circumstances and requirements that the auditor must be aware of in order to properly perform his or her job. The auditor’s understanding of these unique audit requirements will affect the auditor’s conclusions and the auditor’s ability to properly perform his or her role. If you’re going to hire an auditor for the first time, it’s a good idea to hire a few different firms to get a feel for how they approach audits and their clients. This will help you determine which firm will be right for you and your company.
If possible, try to find an auditor who works alone. This will allow the audit team to function as a single unit and will help the audit team remain focused on its core responsibilities. If you’re unable to find an audit firm that works alone, there are still benefits to working with another firm within your organization. The advantage of working with another firm is that you’ll have some level of comfort knowing that you’re not working with unknowns. Working with another firm also gives you the opportunity to get to know other members on your team better.
This is one of the most important questions you can ask an auditor. The percentage that the auditor must complete his or her career as an accountant depends on several factors, including the nature of the firm and the individual auditor’s experience. If you’re unsure whether an auditor has experience in your specific area, you can always check with the firm’s management. Typically, an accountant will complete around 35-40% of his or her career as an auditor. While it’s certainly possible that an accountant could complete his or her entire career as an audit manager and never audit a single financial statement, this is highly unlikely.
As you likely know by now, the audit process is highly sensitive and private information should be kept strictly confidential. This is why you want to make sure that your auditors are aware of the importance of having good relationships and involving the community in your audit process. If you have any concerns about the impartiality of an audit, it is your responsibility to seek out a conflict of interest alert or challenge the audit and have it redone. This is thehallmark of an audit and ensures that the audit is conducted ethically and in compliance with the law.
It is very important to have audit teams that are aware of their role in the rest of the organization. This can be done by holding regular “audit-outs” where the team can go away and do a separate audit. It can also be done by having regular “audit get-togethers” with other members of the team. This way, you’ll be sure to stay in touch with all of your team members and let them know what’s happening in your audit.
As you can see, there are many important questions to ask before hiring an auditor. To help you better understand what to look for in an audit, here are a few things to keep in mind: - The auditor’s culture should be welcoming and friendly. This means that the team is free to speak their minds, be themselves, and treat others with respect. - The auditor’s ethics policy should be clear, detailed, and consistent with your own policies.
This includes prohibiting conflicts of interest and ensuring that the audit process is fair and unbiased. - Finally, the auditor’s management must be able to back up their assertions about the auditor with facts. This is a sign of a healthy relationship between the staff and management and will help the audit process go smoother.
An audit can be a dangerous and complicated process. The integrity of your financial information is important, so you should do your best to make sure that your auditing team is well-versed in the proper procedures. In fact, an audit is just a formal check-up from the government. It’s not a perfect process and there’s always a chance that something will go wrong. It’s why it’s important to have a well-versed audit team who are aware of the proper procedures and have the necessary experience to properly conduct their audits.
To make sure that your audit team has the knowledge and experience you need, consider the following questions before you hire an auditor. Doing so will help you better understand the attributes that make a great auditing firm and will help you find a partner that you can trust to help you navigate your audit process successfully.