PBMares Accounting Blog

10 Signs It May Be Time to Shop for a New Auditor

Posted by Shawn Middleton, CPA on Aug 10, 2017 4:14:23 PM

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Thinking about hiring a new auditor can be overwhelming. Many times over the years I have heard auditees say, “I don’t want to get used to a new auditor, or have to deal with a new process.” They want to stick with what’s comfortable and familiar, despite the possibility that a better option may exist out there. However, there could be an auditor that is a much better fit for your organization, and you are missing out on an opportunity to better serve your organization by not considering the below items. Here are 10 signs that it may be time to consider a change. There are in no particular order, as each organization may feel certain items are more important than others.

1) Lack of experience – Does you auditor seem more like an intern rather than someone who understands the ins and outs of nonprofit accounting? This has never been more important than it is now due to all of the new accounting standard changes that are being rolled out.

2) Absence of value added recommendations – Are your current auditor recommendations limited to the debits and credits of the organization? Do they provide thoughts during the audit that will help your organization’s operations? For many entities, there is no outsider that has the same type of access to your organization as your auditor, and if they aren’t providing operational recommendations, the value of your audit has been limited.

3) Lack of presence and responsiveness – Does your auditor show up for a short time and then disappear, possibly leaving, all the while you have no idea where you are in the process? Do your auditors never show up at all? (Yes, this does happen.)

4) Predictability – Do you know what you auditor will look at each year – what accounts they look at the most, which journal entries they are bound to pick? If so, this defeats the purpose of the audit entirely, and increases the risk on fraud occurring and not being discovered.

5) Lack of understanding – do you feel your auditor doesn’t understand your model or your mission? Do they take the time during planning to really understand what your organization is trying to accomplish and how they do it? This is very relevant in the nonprofit arena, especially given the desire to accomplish a service oriented mission while remaining solvent.

6) Inflexible – is your auditor willing to work with your culture and schedule? Maybe dressing in business casual attire will make your employees more comfortable. Does your current auditor even ask?

7) Lack of communication skills – Does your auditor communicate in a way that you understand what they need and why they need it? Do they explain the audit process to you so that you don’t feel like you are guessing? Communication or lack thereof, is the biggest complaint I hear of among auditees and why they seek a new provider.

8) Unreliable – Does your auditor communicate the audit plan and timeline, and do they stick to the plan?

9) Who’s who - Do you know the roles of those on your audit team? Knowing who is in charge, and whose doing what will help your staff know how to better accommodate the needs of the audit team and things will run much smoother.

10) Indifferent - Does your auditor care what is important to you? This is very important. Does your auditor care about the drivers you find important? Do they ask you, “What is important to you and this organization?”

If the 10 signs above look familiar or even if some of them do, maybe it’s time to consider a change. If you have concerns, discuss them with your auditor.  If they don’t respond positively and aren’t accommodating your needs (see #10), you need to find a new auditor.

Topics: Not-for-Profits

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Shawn Middleton, CPA is a Manager at PBMares, LLP, an accounting and business consulting firm serving clients throughout the Mid-Atlantic. For more information, please contact the author at  [email protected] or visit: www.pbmares.com

 

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