Now more than ever, a robust and objective audit function with skills to identify risk, control problems and the authority to pursue concerns, is essential for sound corporate governance.
Corporate governance has been widely criticised in recent years, in the wake of falling market confidence and integrity. The community’s expectations of boards, senior management, and those charged with providing an independent review of a company’s operations and financial accounts have been raised.
In this demanding environment, boards and senior management need quality advice from sources that can be trusted to offer an objective viewpoint. A good auditor is one source that provides that objective viewpoint. If you’re not getting that objectivity, maybe you should be!
5 warning signs you need a new auditor
- Inexperience: The auditor/audit team is inexperienced to handle your business, industry or business situation. Your audit team should have a wealth of experience in handling similar situations and be able to apply this experience to your audit.
- Lacks understanding: The auditor/audit team does not take an interest in understanding your business. No business is the same and if your audit team doesn’t understand the intricacies of your business, the audit is counterproductive.
- Poorly planned: The audit does not appear to be well planned or executed.
- Lack of value: There is no value being added throughout the audit process. The concept of the audit is to review the business from an unbiased position to identify areas for improvement adding value to the business.
- Disruptive: The audit is creating unnecessary disruption to your business.
Practical steps to overcome a poor audit function
- Make the decision to change
- Identify your priorities in the conduct of the audit (e.g. price, experience, efficiency)
- Identify potential auditors and interview them to ensure they meet your needs.
- Decide on the new auditor and appoint them.
There will be some Corporations Act requirements following the decision to appoint a new auditor, with mandated notice periods. To ensure you have your auditor in place by the end of the year the decision to change and a new appointment made ideally should take place, by the end of April for June year-end.
Final thought: A good auditor will guide you through the Corporations Act change process.
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