Are you doing Audits for clients that you really should not be doing? How to tell when to outsource Audit work.
Many accounting firms do audits because they feel the need to provide a holistic service and create a fence around the client.
But the realities need to be considered.
There are real risks involved with audit work. Appropriate skills come only from specialisation.
Here are 13 signs that it is time to partner with an independent Audit firm:
- No Audit Expertise: If neither you, nor any team members have strong audit expertise.
- No interest: Your team members have no interest in auditing.
- No training: If no one from your practice regularly attends audit training. (CPD)
- If you don’t keep up to date with the 60 current mandatory audit/ assurance/review standards formulated by the Auditing and Assurance Standards Board (AUASB).
- Not your core business activity: When the audit work needs to be done, it becomes an interruption to other business services work that people are better at, and enjoy doing more than audit.
- If your accounting services work is more profitable than the audit work undertaken.
- Too risky: If the Audit work you complete adds to the risks you take and the cost of your PI Insurance premium in a manner that is out of proportion to the benefits.
- You never refer to someone else: If you don’t refer audit work to someone outside of your firm for fear of clients being poached or clients leaving your firm.
- You don’t like being audited yourself: If you feel uncomfortable for your audit work to undergo a Quality Control Review.
- Have no clue: If you’re unaware of the 21 specific auditing guidance statements (GS001 – GS0521) or don’t know how to use them appropriately.
- Not compliant?: If you’re unsure whether or not you comply with APES 110 independence requirements.
- Lack of independence: If you’re not a genuine independent auditor (consider SMSFs, Trust A/Cs, QBCC, NFPs etc.)
- Conflicts of interest: If you didn’t know it’s not possible to satisfy the mandatory professional independence requirements if one public practice certificate holder is the auditor and tax agent for the same entity or related entities. If any of the above statements apply to you, then you should consider finding a reliable and trusted supplier of Audit services.
A word of caution though: the danger of referring clients directly to bigger Accounting firms (who happen to also do some Audit work) is there is the real possibility of these firms – your competitors – stealing your clients.
Naturally, your clients would in time discover they can get all their accounting and audit requirements met under the ‘one roof’, and so the next you hear of them, is via the dreaded ethical letter from their new accountant.
There is however, an alternative solution, one that would give you peace of mind and full control of client relationships.
This solution applies to any accountant or accounting firm that finds Audit work:
- A ‘pain’ to do….but still recognise its value and importance to offer clients (but worried about referring audit work to another accounting firm).
You could look to partner with an Australian based specialist Audit firm, rather than ‘palm’ it off to a mid-tier competitor or outsource to an offshore contractor (with no quality control or have limited visibility of quality control).
Fortunately, there is a specialist Audit firm based in Brisbane – C&N Audit Services – that is completely focused on Audit work; an entire team of experienced Audit professionals that are not distracted with other accounting assignments. All of whom focus solely on empowering Accounting firms to provide a reliable and quality audit service offering to clients.
C&N Audit Services is a convenient, Outsource ‘Back-of-Office’ Solution for Accounting firms. By partnering with an outsourced Audit specialist firm, you can Get Quality Audit & Assurance Reviews done for your clients by a dedicated team working with you and for you, all the while retaining full confidence and control of the relationship with the client.