12 Oct Top questions to ask an external auditor
Conducting audits are necessary to ensure that a company’s financial records are correct and within tax laws, and there is no one more fit for the role than an external auditor.
Simply put, an external auditor is someone whom a company hires to giving an independent analysis of that company’s monetary statements. They are employed outside of the company in order to be objective in their reports. External auditors are tasked with reviewing the finances and identifying areas where internal operations can be improved on. Their knowledge and experience enables them to offer expert recommendations on how to better facilitate the accounting process.
The role of an external auditor is extremely important in providing credibility to the assessment of the financial statements; this prevents fraud.
When hiring an external auditor, it is obvious that qualifications matter. However, if you want to be sure that you are hiring the perfect person for the job, you should consider asking these questions to get a better perspective from your potential candidates:
- Could we meet the auditors in charge in charge of overlooking our finances?
You need a team of auditors who are able to work well with your employees, especially when the audit is in progress. Hence you should ask for a face-to-face meeting with your potential auditors. This allows you to better judge whether they are the most suitable people for your company and if you will be able to establish a efficient working relationship when obstacles are met.
- What is your team’s communication style?
Communication matters in external auditing. The auditors need to be transparent in how they work so that it builds trust between them and your employees, and keeps you aware of what is going on. They should also be able to answer any questions that you might have in a way that is easy for you to comprehend.
- How much do you charge and what is included in the cost?
If the auditors are charging prices that are significantly lower than others, this could be a sign that they do not include the complete auditing services. In addition, you might also need to pay extra costs even when the auditing is finished. Be wary of such companies.
- Have you had prior experience working with a company similar to ours?
Every business industry is different in how it functions. Your auditors may be professionals with years of experience, but it will do little if they have yet to work with a company who is in the same industry as yours. It will cost you money and time if you hire someone who is unfamiliar with how businesses like yours operate. You should hence take this as an opportunity to request to view their references.