Why Audit Quality is Important for Auditees?
Well informed auditees with strong governance structures increase the likelihood of high quality audits and more efficient audits. Why? Experience has shown that these auditees generally spend more time considering the qualifications of a potential auditor during the hiring process and evaluating the reasonableness of an auditor’s anticipated hours in relation to the proposed fee based on the work to be performed. Further, these auditees have a stronger understanding about the audit requirements that apply to them; are better prepared for their audits; and more clearly understand their role in the audit process.
This section of the Auditee Resource Center covers why auditees should be concerned about audit quality, including the importance of having a quality audit, auditee factors affecting audit quality, and 5 steps to improve quality.
- Fulfill your fiduciary responsibility
- Obtain assurance related to the financial integrity of funded programs
- Identify possible non-compliance and other issues early to avoid interruption of current funding;
- Lower the risk of future non-compliance
- Build goodwill among taxpayers, donors and other key stakeholders; and
- Strengthen your ability to secure additional funding in the future.
Auditee Factors Affecting Quality
Taking the following factors in account collectively when selecting an independent auditor will contribute to receiving a quality audit:
- Demonstration of the audit organization’s qualifications in response to your request for proposal;
- Experienced, qualified staff with appropriate technical abilities, particularly with Yellow Book and single audits if applicable to your audit engagement;
- Extent of the audit organization’s practice with organizations like yours (for example, governments or not-for-profits);
- Results of the audit organization’s external peer review; and
- Participation by the audit organization in quality improvement programs (for example, membership in the AICPA Governmental Audit Quality Center)
5 Steps to Improve Quality for Auditees to Consider
- Make sure the audit organization has qualified, knowledgeable staff with the right skills for your financial statement,Yellow Book or single audits.
- Grant your auditor access to all the necessary financial and program records and be sure to identify all governmental financial assistance and federal programs in which you participate
- Ensure that key staff personnel are available to your auditor.
- Be actively involved – take the initiative to understand what your auditor is doing and ask questions when you don’t.
- Make the most out of the exit process –ask questions about your auditor’s work, the audit opinion, and other compliance reports.
