Apr 18 Qualities Of A Good Auditor
Most business leaders are well aware of the importance of hiring a good auditor to review their financial statements. These auditors are able to provide independent reports to internal stakeholders, such as management and shareholders, in order to better inform their decision-making processes and ultimately improve the operations of a business. Financial statement audits prepared by third-party auditors may also be provided to external parties, such as the IRS, and help them determine the accuracy of a business’s financial information.
There are a variety of reasons these audits may be performed, and the reasons vary based on factors like the size and industry of a particular business. Many companies, especially those who are faced with a pressing need for an audit due to a legal or tax-related matter, do not need to be convinced of the need for a quality auditor. Actually finding a quality auditor, however, is an altogether different proposition. Many business owners with their backs against the wall—or who simply have a tendency to push full steam ahead with any new idea—are prone to rushing the process of finding a quality auditor.
It is advisable to instead adopt a more methodical approach to determining the Clifton NJ auditing professional that can be trusted with a crucial aspect of a business’s finances. Over the course of a deliberate search for an effective auditor, here are some qualities to determine and assess.
Business owners are usually adept at quickly ascertaining whether or not someone has the experience necessary to make a positive impact on their business. Business owners exercise this judgment when hiring internal staff or contracting out traditional accounting services but often neglect to apply the same standards for auditors. An auditor should not only have a track record of auditing success but also a specific track record of demonstrable success with businesses of comparable size in the same industry. The more relevant the auditor’s experience is to a business’s particular situation, the more likely the auditor will be able to produce a desirable result.
Working with a reputable financial services firm can increase the chances that an auditor will perform quality work. One major way to determine the effectiveness of a CPA financial services firm is to obtain references both from the company and from businesses who have worked with the firm. Another way to assess the quality of a firm is to look at their membership in reputable professional accounting organizations or to look at the results of their recent peer reviews. Peer reviews are assessments of an accounting firm conducted by independent accounting firms.
It is vital that a business’s auditor be as independent as possible from the business to avoid breaching any ethical or legal standards and to obtain the most objective audit possible. There are a variety of guidelines that independent auditors must follow that are established by national accounting organizations and by government agencies providing financial oversight.
Specifically, a firm’s or professional’s qualifications can be checked out with state regulatory authorities to confirm that they hold all the valid licenses and certificates necessary to provide auditing services. Depending on the state, this information may also be available online.