Changing Auditors: What Makes a Good Auditor?

“I’m getting to the point of being sick to death with our auditor”

These are powerful words that can either strike fear into the heart of an auditor, or create a sense of relief if they’re aimed at someone else. In this particular case, I already knew the problems that our client was having with their auditors. This specific client, who we provide technical support for, had changed their auditor three years ago from a top tier firm to a second-tier firm.

Three audits, two different audit managers, three entirely different audit teams and only the audit partner present for continuity, this year had been particularly bad for the client. Their reports and analysis, provided back in May, were left unread and uncommented on by the audit manager until finalisation.

Unfortunately, it’s not an uncommon story, and a situation that is more prevalent with the larger firms for several reasons, including the fact that some top-tier firms tend to have higher staff turnover rates.

It’s also ironic that one of the biggest deterrents to changing auditors is the time cost of first year procedures and the need to thoroughly explain everything to new auditors. If not carried out efficiently, this is something which can cause delays and, therefore, frustration.

Why is continuity important in auditing?

Over the 25 years I’ve worked in audit, most of them at Rayner Essex, there have been many occasions where we have assisted non-audit clients with their auditors. Sometimes it’s been because of a buyout, with the group auditor taking over the audit role, or sometimes an inexperienced team has simply needed assistance.

I will never forget one particular audit which we assisted a client with around 10 years ago, where I was called on-site to help assist the audit manager review. It had been a fragmented audit and the manager, who was the third manager during the audit, needed help to understand the audit journal adjustments that the first manager had agreed with the client.

Now this is an extreme example, so extreme that you may believe I have made it up to emphasise a point, but I promise you I haven’t. What it does highlight, however unsubtly, is the importance of continuity of service from your auditor and readily accessible contact with senior staff who are responsive to you.

What makes a good auditor?

When I quote for audit services at Rayner Essex, I find there are often two main drivers for prospective clients switching auditors. These are fees and client relationship. Rayner Essex provides a quality audit service and, while we are price competitive, we don’t lowball our quotes to win clients. Instead, we prefer to be upfront on the cost and quote a fair fee for a comprehensive service, ensuring there are no hidden costs and surprises later on. At Rayner Essex, we base our approach to winning clients on our high standard of client service, backed up by a technically strong audit team.

What this means in practical terms is the antithesis of a top 10 firm approach. We strive to ensure that the audit partner and manager are available for our clients all year round to discuss any issues as they may arise, and we ensure there is continuity in our audit teams. If an audit lead isn’t conducting the audit in subsequent years, this will simply be because one of the assistant members of staff that previously worked on the job has progressed enough to lead the job, ensuring continuity.

How can the process of changing auditors be made more efficient?

We understand that audits can sometimes be time consuming, disruptive and create a distraction from running a business. However, it’s only logical to say that continuity is an antidote to all these issues, and it never ceases to confuse me as to why this is not better understood by the auditing profession.

Of course, some may say that continuity breeds familiarity which breeds complacency. This is something that we take very seriously at Rayner Essex, with procedures in place to prevent it from happening.

In situations where the audit partner has been in the role for ten years, we have an independent second partner to review. In addition, if the client feels that they need a “fresh pair of eyes” overseeing the audit, we can facilitate the transfer of the client to another audit partner, even from another office if necessary. This enables the client to have a new audit team look after them, but with the same client focused process, without having to undergo the rigmarole of tendering and first year procedures.

Find out more about our audit services, or contact Alex Walsh directly. Alternatively, fill out the form below and we will get back to you.