Guide to changing your auditor

As your business grows, your needs become more complex and specialized. You may require deeper industry knowledge, wider geographic reach, clearer communications or a stronger digital approach. When your audit firm can serve your evolving organization, your business goals come within reach. Otherwise, it may be time to change your auditor.

In fact, changing auditors isn’t unusual in the business world—it is a well established practice, with many organizations routinely reassessing their audit partners to align with evolving needs and strategic goals. For organizations, changing auditors can be a natural step in maintaining fresh perspectives and strengthening financial oversight.

While there is a science to finding the best auditing firm for your needs, there is also a soft-skills element. The chemistry you have with your auditor and your audit team can make all the difference. The right audit firm understands your business and delivers human insights powered by technology. But how do you find that firm, and once you do, how do you forge a productive working relationship?

Use these insights from RSM to help you make the right decision.

The guidance below is designed to lead you through the process of changing your audit firm and transitioning as smoothly and efficiently as possible. It is based on RSM’s deep experience in building new audit relationships with many companies over the years and should help give you a strong foundation for this important undertaking.

What are the most common symptoms of a suboptimal audit relationship?

For many reasons, a company may feel that their audit firm is not meeting their expectations. In our experience, the top three things that companies are looking for in a better audit relationship are:

Industry or technical expertise

Your current auditor may not fully understand your industry’s specific complexities and regulatory requirements. They may not be able to handle your evolving financial reporting needs or provide technical accounting at the depth you need. There may be deficiencies in risk assessment and testing, and other quality issues. They may not be able to provide specialized audit services that you need beyond standard financial audits.

Strategic insight

Many companies want to derive more actionable information and unique insights from their financial reporting than their current auditor can provide. They want more than just an audit—they want to gain a better understanding of their business and leverage an audit firm’s experience working with similar companies. Therefore, they seek an auditor known for its deep analytical capabilities or industry-specific knowledge.

A consultative relationship

Many companies are seeking an audit firm that can provide strategic advice, innovative solutions and other value-added services. A strong relationship between a company and their auditor is critical for transparency, efficiency and collaboration. If your auditor doesn’t fully understand your business objectives or if you lack mutual trust and respect, it may be time to find a more productive working relationship to better support your needs.

Of course, there may be other reasons why you may believe it is time to change your auditor. For example, you may be expanding internationally and need an auditor with the global reach and capability to align with your growth strategy. Or you may be running into financing roadblocks because your current audit firm does not have the size and reputation to win the confidence of lenders and investors. Having a strong, reputable audit firm behind you can enhance the perceived reliability of your financial statements and creditworthiness, potentially leading to better financing terms.

What questions should you ask when evaluating an audit firm?

When evaluating a new audit firm, it is important to get a good understanding of the firm’s capabilities, audit approach and general character. It makes sense to spend time on developing an RFP (request for proposal) specifically designed to test the unique fit between your company and the prospective firm.

To find an audit firm that is truly a great fit for your company, think beyond the audit itself. How can your auditor add value beyond the audit? Do they have deep experience in your industry and knowledge of best practices that you can leverage to improve your business? These criteria are often overlooked when searching for an auditor, but they can pay dividends over the long term.

Here, we list some top questions to ask a new audit firm during the evaluation process.

Why do technology and innovation matter when choosing an auditor?

If your company is increasingly deploying advanced technology to become more efficient, you should expect your auditor to be doing the same thing—investing in technology to optimize the audit process and make it work better for you.

A digital audit ecosystem is now the entry point to a modern audit experience, so evaluate whether an auditor has innovation in their DNA. This is not just a matter of efficiency; it makes for a stronger audit relationship with clients and enables better insights for you.

Of course, technology on its own only goes so far. Leaning too heavily on technology may not provide the appropriate level of personal attention or the necessary technical insights.

What are some best practices for transitioning to a new audit firm?

Changing your auditor is not a light undertaking. You must be clear about your reasons for change and what you are looking for in a new auditor.

• Start with a strong RFP for audit services. Clearly spell out your needs to help build an auditor’s understanding of your company’s priorities and lay the groundwork for a smooth transition.

• Be clear about the areas you want to improve. For example, highlight key characteristics you seek in a new audit firm, such as communication skills, industry specialization, global capabilities and digital expertise.

• Ask prospective audit firms about:

  • Their audit approach
  • Their transition processes
  • Their measures for ensuring client satisfaction

• Once you select a firm, educate your new audit firm on your company.  Face-to-face interactions, whether in a conference room or a coffee shop or on the factory floor, are crucial to help new auditors understand your business and develop mutual chemistry in the relationships that matter in a high-quality audit.

Superior service has no size constraints, and a frictionless transition only amplifies the opportunities for your business.

Audit-related terms and FAQ