Dealing with an audit can be challenging. New businesses can be difficult (and expensive) to discover and maintain. Customer maintenance could possibly depend on the cost of the protection elements themselves, but the administration and information provided by your office.
Most business owners see the audit as an essential evil, however, most do not see how it works, it is an irrelevant element. Tragically, the use of the “element” simply occurs after a setback, episode or debacle when stress and pressure are high.
Auditors are important professional advisors to nonprofits. Good auditors will help you keep your financial house in order, identify issues that need the attention of board members and management, and assist with any necessary corrective action plans.
Moreover, a “clean” audit from a respected CPA firm provides a measure of credibility to the organization.
There is one school of thought that holds that it is good practice to change auditors every few years, to have the benefit of a new perspective on the organization’s financial operations. Others believe that a long-term audit relationship translates into better understanding of the whole picture and therefore more value to the nonprofit client.
Regardless of your position on this issue, if you’re not getting good service, you should be looking for a new auditor. But can you recognize when danger signs exist in your relationship? The following list of indicators may help you to identify potential problems.
Performing an effective audit means more than obtaining the correct schedules and reports; it includes assessing crucial concerns in the external environment.
If your auditors are unaware of key industry trends, your regulatory environment, and where your organization is heading, then they are unprepared to do the comprehensive job you have a right to expect.
Auditors should be asking themselves and you, “What’s out there that can affect how my client is—or should be—doing business?”
Some auditors may not listen to the specifics of an organization’s concerns or apply recommendations that worked for others. That is irresponsible and can cause serious problems.
Providing professional services means that an auditor should “serve” each client with expertise specific to its needs. Displaying general competence and knowledge isn’t enough.
Auditors should be sensitive to their client’s work environment.
It’s important for auditors to recognize and appreciate the organization’s norms, how staff interact with one another, their preferred method of corresponding and communicating, their workday schedule and their work spaces.
Following the staff’s lead in workplace dynamics shows respect for the organization.
Auditors who don’t call you until a week or two before the start of fieldwork are in effect telling you that your organization is not a priority. You should expect a better level of communication.
Auditors should demonstrate to you that they have properly planned, regardless of your size and the size of your audit fees.
They should make themselves available to answer questions about changes in your agency and should make phone contact themselves between audits (if they do not perform an interim audit or review).
This is necessary to identify any changes that could affect the year-end audit. Appropriate communication minimizes surprises—leading to better timeliness and an easier time keeping abreast of the big picture.
An auditor should always consider services and products that can improve controls and business processes.
With the rate of technological and other changes in the environment, if your auditors never or seldom offer this kind of feedback, they may just not be paying attention.
You should expect the auditor to inquire about the status of prior year Management Letter Comments (MLCs).
Again, auditors must demonstrate to you that your issues are of concern to them. It’s not enough to identify control weaknesses or material misstatements.
It is now fairly standard practice for the auditor to work with management and the board to at least develop a plan to address concerns identified in management letters.
Auditors cannot perform effective audits if they are not up to date on accounting bulletins and auditing changes. The organization should expect to rely on the auditor for expert level guidance.
Auditors not current on accounting standards are less likely to design and perform audits that minimize the organization’s long-term financial risks.
In general, auditors must use professional skepticism, which means that they should maintain an arm’s length relationship with staff and board. Although the organization pays audit fees, and the auditor has a contractual relationship with the staff or board of the organization, the auditor is ultimately responsible to the organization’s constituents, including funders, for performing a high quality audit.
They should use due care in their judgments. An auditor who frequently dismisses known issues, waives explainable differences, or otherwise is overly lenient, is contributing to a serious breakdown in your accountability mechanisms.
An auditor’s relationship with the staff or board should never compromise his or her duty to the public.
As for the institution itself, the short run gain of appearing to have a clean audit is not worth the long-term risk of having issues blow up and place at risk its funding base and, more importantly, the trust of the community.
Auditors are professional vendors. They provide a service that is, in nonprofits, paid by private and public funds that are received on behalf of constituents.
The audit team, therefore, ought to reflect the diversity of the clients it serves.
Many organizations are guilty of holding up their own audit work by closing the books late or not preparing information as requested. But if the organization has fulfilled its part, it has a right to expect an opinion on its audited or reviewed financials on time.
While the audit time frame may differ based on the size and complexity of the organization, as well as its regulatory and other deadlines, on principle the auditor should get the job done when promised.
Performing an audit is crucial to keeping your records clean, healthy, and legitimate. Just as getting an annual check-up keeps you in the best condition to enjoy life, you need to find a partner, whether that’s a doctor or an auditing firm, who can be your ally in achieving those goals.
The task might seem daunting, but the more thought you put into choosing an auditing firm in Dubai, the better your relationship and audit results will be. A functioning partnership makes the auditing process much easier to manage, so make sure you look for all the right factors when making this decision.
You can use this article as an evaluation tool. Pull it out occasionally and consider the performance of your auditor. Communicate concerns. If they are not willing to make changes, then it might be time to look for another approved audit firm in Dubai,UAE.