How to choose your auditor – Accounting and auditing
Malta: How to choose your auditor
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Choosing the right auditor is an important decision that companies must make. It is likely that you will work with your auditor year after year and their knowledge is an integral part of your organization. So how do you choose the best auditor for your firm?
A common misconception among small businesses and family businesses is that an audit is just an additional burden required to meet administrative compliance regulations. However, this should not be the case and the audit process should be able to provide much more than that. The right auditor should be able to
add value to your business. We have defined some requirements that firms should consider before hiring their auditor.
Things to watch out for
- Industrial experience
No one knows your business as much as you do. However, your appointed auditor should be versatile enough and have valuable industry insight. An auditor with such knowledge means that the assignment will be more effective because less time will be spent on generic questions. Additionally, the auditor will be able to bring in a wealth of industry knowledge that will eventually help promote your business.
- Experienced staff
Having experienced staff on the audit engagement team complements the above. A stable audit firm is a firm with little staff turnover. In turn, this gives stability to the audit engagement team assigned to you. There is nothing more boring than having to repeat the same understanding to new audit engagement teams year after year. Staff continuity will also result in a more efficient audit.
- Planning the audit
As you seek to engage your auditor, ask them questions about how the auditors plan to perform the engagement and seek to be part of such a planning process. This will not only help you and your firm to have an effective audit, but it will also help you determine the knowledge held by the auditor.
In order for businesses and individuals to conduct legal audits, they must go through a thorough process that involves having years of experience in the profession and a number of academic qualifications. Only limited liability firms and individuals are authorized to perform audit assignments accepted by the authorities. When selecting your auditor, ensure that the firm is authorized to do so by consulting the relevant records. In Malta, this can be easily verified by consulting the accounting board register. Ours is here.
While the cost of implementing the latest technology in audit firms is an expensive process, it shouldn’t be a deterrent. An audit firm that refuses to keep abreast of the latest technology puts its clients at a disadvantage. The use of technology enables much more efficient audit engagement and provides valuable insight from data analysis that you would otherwise miss as a client. Faster auditors are able to find anomalies meaning they can instead direct their resources to performing valuable analysis which, in turn, will undoubtedly lead to added value for your business.
Having a good reputation is such an essential prerequisite for auditors that many of our codes of ethics state that an auditor should always act in a way that does not tarnish the reputation of the profession. Yet time and again, cases emerge that show audit firms were at the center of scandals, both locally and internationally. Having an auditor with a bad or bad reputation takes a huge toll on you as a client. So, when it comes to choosing your listener, analyze their reputation and interrogate their methodology to help you determine whether or not there should be cause for concern.
- Ongoing support
Good listeners are those who can also give you additional support throughout the year and are able to bring matters to your attention that would otherwise go unnoticed. Most decisions made in small family businesses require quick professional support which can only be provided if your auditor knows your business and your business.
- Verification fees
It is often said that the devil is in the details. When accepting the fees for the audit engagement, make sure you understand the mechanism involved in determining the audit fee and confirm that there are no unusual penalties or additional charges. While you’re expected to get what you pay for, high fees don’t necessarily mean exceptional service will be provided. On the other hand, unreasonably low charges should be initial indicators to question the service that will be provided. Therefore, make sure you know what you are getting as much as possible in advance.
The next time you choose your listener, keep all of this in mind. At Borg Galea & Associates, we strive to do more than stamp your numbers. Our goal is to be a vital business partner for you and your business and we make sure we’re always here to provide you with the necessary support and in-depth business information that will shape the future of your organization.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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