At a Glance
Main Takeaway
Choosing the right accounting audit firm for your business is crucial to ensuring the integrity and accuracy of your financial statements.
When selecting an audit partner, consider a firm’s experience, industry knowledge, and reputation. By carefully evaluating your options and considering your business’s specific needs, you can choose a trustworthy, skilled auditing firm to work with your company.
The Right Audit Firm is Crucial to Your Business
Selecting the right audit firm is integral to your company’s success. An experienced and reputable audit partner provides valuable insight into your company’s financial health. They will identify areas for improvement and ensure that your financial statements are accurate and comply with Generally Accepted Accounting Principles (GAAP).
An independent audit also provides credibility to your financial statements, which is crucial for attracting investors, lenders, and customers. A thorough audit can help your company identify weaknesses in reporting to improve internal controls and mitigate risks.
What to Look for in an Audit Partner
When searching for an audit partner, take the time to find the right firm for your specific needs. You will want to narrow down candidate firms by evaluating their reputation, industry experience, knowledge, and certifications. Consider the following performance indicators:
Technical and Industry Knowledge
Your audit partner’s technical expertise and industry experience are essential for succeeding in a global environment. These elements ensure proper guidance on new accounting standards, communication, and in-depth understanding and expertise to explain new regulatory developments.
Industry knowledge is crucial in audits to identify risks. For example, if your company is a fiduciary for its employee benefits plans, you must comply with all ERISA regulations. An ERISA-specialized audit team will ensure compliance and help prevent your company from making costly mistakes.
If your company is a construction contractor, your financial statements and schedules should meet bonding expectations and requirements. An audit team that specializes in the construction industry would understand and be able to assist you with any presentation and performance requirements.
If your company needs assistance with its lease accounting, look for an audit firm specializing in ASC 842 leases.
Integrity and Values
Operating ethics in financial accounting are principles and standards that guide the behavior of individuals and organizations in the financial accounting industry. Ethical principles cover many areas, such as integrity, professionalism, confidentiality, objectivity, and independence.
Integrity and objectivity are critical factors in selecting an audit partner. Integrity refers to qualities like honesty and operating according to ethical principles. Look for a firm like Windes that embraces values such as objectivity, competency, and transparency. These qualities in an audit partner help ensure that the audit is conducted accurately, minimizing the risk of fines or penalties for non-compliance issues.
Objectivity is necessary for financial auditing because it helps ensure that financial statements are represented accurately. In financial auditing, objectivity refers to the auditor’s independence from the client and the ability to conduct the audit without bias. This means that the auditor should not have any financial or personal interest in the audit’s outcome and should not be influenced by the client.
Value-Add for Your Company
Look for an audit firm that pushes your organization to do better each year, guides you through best practices and recommendations to strengthen internal controls, and provides realistic solutions. Your auditor should bring new insights to the table and suggest opportunities to improve financial performance.
As a private company, you may be more interested in the additional value a firm with multiple service lines can provide. An audit firm such as Windes that has advisory services can present you with growth opportunities and help your company mitigate risks.
Special Considerations
Before finalizing your decision to work with a partner for an accounting audit, there are special considerations you should take into account, such as the management experience level of your organization’s team and how the auditors will align with your team’s responsibilities and expertise.
Although virtual tools allow you to work with an accounting firm from any location, you may also want to select a firm that operates in your state or locality. For example, Los Angeles County in California has new tax rules for companies that invest in high-value real estate properties. Choosing a firm like Windes that understands location-specific regulations and changes ensures you have the most up-to-date assurance and tax services for your business.
How to Find a Trustworthy Audit Partner
Finding a trustworthy and qualified audit partner means thoroughly researching potential firms and conducting due diligence. There are several tools and resources you can use to find the right audit partner for your business, including:
Referrals
Referrals are an excellent starting point for finding a reputable, qualified audit partner. Gather referrals from business owners in your industry or professional contacts in your network. When speaking to others about audit firms they’ve worked with, ask about their specific experiences with the firm, technical knowledge, and value-add for their company.
Professional Organizations
Consider going through a professional organization for referrals. Many professional organizations offer networking resources to members, which can help connect you to the right audit firm or another industry business that can refer you to a firm they’ve utilized.
The American Institute of Certified Public Accountants (AICPA) maintains a firm search feature where you can browse companies that are members of the Private Company Practice Section or Employee Benefit Plan Audit Quality Center. You can also use the tool to verify a referral by entering the firm’s name, city, state, or AICPA number.
Request for Proposal
Your business can issue a Request for Proposal (RFP) to a few auditing firms to narrow your search for the right partner. An RFP lets you outline your company’s needs based on your specific requirements, industry, size, and financial status.
Send multiple RFPs to potential auditors and review their responses carefully. Create a shortlist of firms that meet your needs and speak with their auditing team to make a final decision based on their qualifications, industry experience, and how they will work with your management team.
What to Ask
Schedule a consultation with a potential audit partner to ask questions and assess their fit with your company. Depending on what characteristics are important to you and your company, focus on specific interview topics and questions that can help you gather information.
Ask about the firm’s accounting expertise, industry knowledge, availability, integrity, and other aspects of its experience and background. The following is a list of potential questions organized by key characteristics. You may want to ask about availability regarding the number of professionals and whether they have high or low turnover compared to the industry standard. You can also ask and check online searches with state boards of accountancy, the AICPA, or the Public Company Accounting Oversight Board (PCAOB) for possible non-compliance with professional standards or disciplinary actions.
In addition to knowing the firm’s industry expertise, ask about its partners’ industry experience and background in terms of leadership and involvement on technical committees. Finally, independence and objectivity are critical when choosing your audit firm. Ask about the firm’s policy regarding potential conflicts of interest and how pressure from management or stakeholders is identified and managed to ensure that a business or personal relationship does not compromise professional judgment.
Tips for Starting a Successful Audit Partner Relationship
As the audit process begins, it is helpful to establish clear communication and protocols with your audit partner. Be proactive in briefing your staff and setting rules for productive interactions.
- Work cooperatively with the auditor to support their work.
- Avoid common misconceptions about the audit process.
- Remember that the auditor is not a friend or adversary but a professional serving a valuable role.
- Help them maintain skepticism and clear communication between executives.
- Avoid seeing the audit as a threat and provide quick responses to requests.
- Be transparent about any contentious accounting issues, and do not feel threatened when communicating with the auditor.
- Remember that the auditor is also doing their job, just like the company’s financial staff.
Make Windes Your New Audit Partner
The audit partner you choose can affect your company’s operational and financial success. Windes has provided professional audit and assurance services for private businesses and nonprofit organizations for nearly a century.
Our audit teams have extensive technical knowledge and expertise in a broad range of industries and services, including ASC 842 lease accounting and ERISA compliance. We belong to numerous professional organizations, including the American Institute of Certified Public Accountants (AICPA), the California Society of Certified Public Accountants (CalCPA), the AICPA Employee Benefit Plan Audit Quality Center (EBPAQC), the AICPA Center for Audit Quality (CAQ), the AICPA Governmental Audit Quality Center (GAQC), and the AICPA Private Companies Practice Section (PCPS) to name a few.
Windes’ audit and assurance approach combines professional audit staff, industry-specific expertise, and technical knowledge to offer top-level assurance services throughout the year. We are dedicated to adding value to your business through exceptional communication and collaboration with your management team.
Connect with our audit and assurance team today to learn why we may be the perfect audit partner for your company.
