When it comes to auditing, companies tend to stay with their auditing firm for an average of 15 years, with the average duration being 10 years. However, changing auditing firms is a process that many companies undergo at some point in time. While there are several different perspectives on the pros and cons of changing auditing firms, it is important to understand the process and how to do it right. Ron Kral, a partner in Kral Ussery LLC, a public accounting firm that offers advisory services, litigation support and internal auditing, believes that mandatory rotation would hamper the ability of audit committees to oversee external auditors.
He also believes that the long-term relationship you establish with an auditor can be an advantage rather than a risk, making the audit faster, less stressful for your team and more valuable for your organization. In order to ensure a robust audit, non-profit organizations should ask if the auditing firm has the ability to conduct the audit virtually, if that's what they are most comfortable with. They should also validate their approach by requesting key quality indicators from an audit and evaluate some scenarios with them to help them understand it. Additionally, they should try to understand the holistic approach to audit quality taken by the auditing firm, as quality assurance partners who are late in the process can cause audit delays.
Once a new auditor has been chosen, your team will have to work to update them, explain the processes, and share the information they probably had to review in the last audit. The AICPA believes that auditing committees should be further strengthened and encouraged to take a more proactive role in overseeing the independent auditor, which would include selecting (or retaining) the most qualified firm for the position. In conclusion, while there are several different perspectives on the pros and cons of changing auditing firms, it is important to understand the process and how to do it right. By taking into account factors such as virtual audits, key quality indicators, holistic approaches to audit quality and proactive roles of auditing committees, non-profit organizations can ensure they get quality audits.
