AUDIT SERVICES

AUDIT SERVICES

AUDIT PROCEDURES

Agreed-upon procedure (AUP) engagements are outlined standards that allow us to partner with companies as an independent third -party to assist them in evaluation of their accounting procedures and records. As an example, an AUP engagement may be requested by an entity interested in acquiring another business. Common accounting procedures performed during these engagements include:

Review of transaction details in specified documentation

Confirmation of information or transactions with third-party organizations

Cross-comparison of documents fitting specified criteria

Evaluation of specific procedures on work performed by third-parties The results of an agreed-upon procedure engagement are presented only as factual findings, without opinions, conclusions or assurances. The final audit report remains restricted to appropriate parties, and adhere to requirements of the AICPA’s Statement on Standards for Attestation Engagements (SSAE).

FINANCIAL STATEMENT AUDIT

An audited financial statement is an SEC requirement for publicly held companies that provides assurance that your management team has presented financial statements that are free from material error. Banks, suppliers and potential buyers may also require audited financial statements as proof that your business is financially sound.

A financial statement audit from Jack Trent & Co includes many of the procedures completed during a review, but greatly increases the level of work performed to test the existence, completeness and valuation of recorded financial statement balances. Our experts will work closely with your team throughout the financial statement analysis. During the audit we will do everything from document the significant processes and evaluate/test the internal controls over such processes, to testing the adequacy and accuracy of footnote disclosures in financials statements to ensure clarity in statements. All to ensure you understand the financials statements. We believe it is the top priority for you and your board, while still offering to help present the financial statements.

REVIEWS AND COMPILATIONS

Financial Statement Review

A financial statement review provides limited assurance. Our financial statement review process is less extensive than a full audit, but more extensive than a compilation. They are designed to evaluate whether your accounting principles are in accordance with Generally Accepted Accounting Principles (GAAP). Atypical review generally includes but is not limited to: analyzing and reporting your financial position and results of operations, including prior year and industry average comparisons and any detectable variations to performing ratio analysis of financial data. We will also analyze debt, lease and other contractual agreements to identify financial obligations. these examples are a few of the many processes that are covered under the financial review umbrella.

Financial Statement Compilations

Compilations are a "low level" assurance, and are often uses when companies need to obtain a loan from a bank or other financial institution. A compilation looks like the following: a) obtaining and understanding your organization and its operations and b) presenting the findings, but NOT issuing an opinion or assurance on the statement.

RELATED AUDIT ARTICLES

FOUR POINT TEST FOR A HEALTHY AUDIT RELATIONSHIP

If you are an accountant and you are reading this article, then it is safe to say your professional world is full of numbers. It may seem very two-dimensional. The irony of this is that it is NOT! Like everything else in life, our industry is made up of RELATIONSHIPS. And the auditing world is no different.

The expectation is that the relationship being entered into will be long and beneficial for both parties. Sometimes auditor introductions are “arranged” through third parties. Other times the introduction is a response to an RFP.  And, like friendships, or any other relationship we have on a personal or professional level, it is crucial that relationship is a healthy one. One of transparency, loyalty, discernment and trust.

For public and private companies, a failed auditing relationship is seriously disheartening, with the repercussions potentially affecting business, brand, and value. Taking time to get to know your potential auditor(s) is worth the very breath you breathe into every minute of company time (and sometimes personal time) you spend investing in it. Need I say this: your company is an entity and has a life of its own. YOU are tasked with deciding who is associated with it. Choose well.

So, when making this decision, what really matters? Given that the tasks that the auditor must complete are prescribed by law and custom, here are four cornerstones you should consider before you hire an auditor:

PEOPLE. Do you remember in English class when learning about the elements of a story? It was the “who, what, when, where and why” you needed to address to create the perfect tale. In the business world there are the same factors; different layers of a company you will conduct business with. People are the “who” of the audit equation. Some of those “who” are the folks that will break the ice and create a place for discussion about the possible fit for business. And these are critical relationships to have. It is the “first impression” of the rest of the cycle of the audit relationship. Do you like them? Feel comfortable with them? Are they knowledgeable of your company and industry? Do you sense they can add value to what you offer as a company?After all, we don’t like to be around people who can add value in a relationship we partake in.

TRANSPARENCY. Audit firms should be completely transparent in describing the processes it follows and the quality-control procedures of how it employs the six essential features of an audit. If an audit firm isn’t transparent in telling you what to expect and when to expect it, the said firm likely won’t be transparent in its practices during the audit.

COMMUNICATION. Communication is key. Can the audit partner articulate an understanding of your company’s chosen risk tolerance and how that tolerance is manifest in your company’s accounting? Will seemingly small issues in the audit be revealed and communicated before they turn into larger issues? Is the audit team helping you understand what questions you should be asking? And conversely, are you open to learning more about what needs to be communicated bi-laterally during your audit. Confirm with your audit team your company has all the necessary information it will need during an audit.

INDUSTRY LEADERS. Diversity and flexibility are assets for an audit company. A fresh attitude, pair of eyes and flexibility can give great new insight and open the door for amazing new profits for your company. The key is to be sure your auditor is accredited. Do they have the proper affiliations in THEIR industry to make them the expert for your company? Not just with professional credentials but are they up to speed on ALL industry standards? Do they know their subject matter? Any research that the audit team must conduct to get up-to-speed on your industry will happen on your dime. And even though all research the audit team does on your dime, diversity in knowledge of other industries brought with them can, and often does, can help them help YOU in BIG way!

With all of the information provided above, it goes without saying your audit pick is HUGE! Don’t be afraid to put your potentials to the test when audit time rolls around. AND…...don’t settle for the status-quo. If you feel inclined to go down a path less traveled, go for it! BIG growth often comes by way of changing things up. Using this four cornerstone approach for an audit can open new doors for and add immense value to your company. Use these four points of reference the next time an audit is looming. You’ll be glad you did!

SEVEN SIGNS OF AUDIT INTEGRITY

The difference between good and great. We can usually tell the difference. And likewise it is in the corporate audit world. A good auditor can rattle off the accounting policies and quality control standards. A great auditor will use these to advocate for the success of your firm. But coming into an audit can be very intimidating and auspicious.

If you are the CEO, CFO or on the audit committee and you need a refresher of what to look for in audit integrity or a newbie to the process here is a list of some high points to consider:

1.Which accountants will work directly with me?

Have you met the audit team? Do you have a bio sheet on each and every one of them? Have you seen them face to face? Getting to know your audit team is critical in not only having a successful audit but establishing a mood of "esprit de corp" through the process. Investing in people (building relationships) and the process can greatly increase your bottom line.

2. Added value.

I’ve heard it once said “everyone has a sign around their neck saying make me feel important.”

It is no different in the corporate audit world. And everyone wants to know what you bring to the table. What do you have that brings value to us? A valid point that is always at the forefront of every relationship.

3. Price.

Billing rates, startup costs, service, and all ancillary costs are all part of the deal. Make sure you know them. All firms should include these in the proposal. And if they don’t do not be sheepish n your request for them. Also, once again, building relationships can strengthen future savings when fees for the audit firm increase.

4. Are you peer-reviewed?

A firm’s participation in the peer-review process is another factor in the reliability equation. Licensed certified public accounting firms must be peer-reviewed once every three years. Check the website of your state’s society of CPAs to find out if the firm has been registered.

5. Who is your typical client?

This should be more specific than a general industry category. Diversity is good. And something that should be more sought after. However, logically, it stands to reason that there will be natural tendency to lean toward one sector or another based on audit experience.

6. Size of firm?

A firm might not have enough CPAs to serve you efficiently if unlicensed professionals are doing much of the work. Firms with at least five CPAs are sufficient for most private companies. But efficacy of a firm is not the sum of its parts alone. Smaller firms are often times bring more value to the table as their fees are lower and their focus is more on doing a great job…... kind of like an underdog in a fight! They work with heart and are not so much part of the big machine.

7. When can we connect?

A good working relationship starts with a good first impression. Any firm that is worth its weight will go to great lengths to ensure that their best foot is put forward. There should be much interface in the beginning. Asking for a meeting or two will help in the stabilization of the relationship. And any audit firm knows this and invites this type of behavior. Make sure you take the time to meet with them and discuss your cares and concerns before you make your decision. A 15 or 30 minute conversation and secure the right firm.

The nuts and bolts of the whole thing:

All of the above mentioned are just some of the things to look for when make the decision as to which audit firm. Of course, the obvious reason is to hire an organization to protect your best interest as a company and protect and hopefully increase your bottom line. Of course, each company has other features that, if asked they are more than happy to share. But leading with these questions will not only guide the conversation in the right direction but will also reveal the integrity of the team. And that is truly what is at stake. The integrity of the audit team. And with these guidelines, you will be able to know full well the audit integrity of your choice.

SEVEN SIGNS OF AUDIT INTEGRITY

The difference between good and great. We can usually tell the difference. And likewise it is in the corporate audit world. A good auditor can rattle off the accounting policies and quality control standards. A great auditor will use these to advocate for the success of your firm.  But coming into an audit can be very intimidating and auspicious. 

If you are the CEO, CFO or on the audit committee and you need a refresher of what to look for in audit integrity or a newbie to the process here is a list of some high points to consider:

1.Which accountants will work directly with me?

Have you met the audit team? Do you have a bio sheet on each and every one of them? Have you seen them face to face? Getting to know your audit team is critical in not only having a successful audit but establishing a mood of "esprit de corp" through the process. Investing in people (building relationships) and the process can greatly increase your bottom line.

2. Added value.

I’ve heard it once said “everyone has a sign around their neck saying make me feel important.”

It is no different in the corporate audit world. And everyone wants to know what you bring to the table. What do you have that brings value to us? A valid point that is always at the forefront of every relationship.

3. Price.

Billing rates, startup costs, service, and all ancillary costs are all part of the deal. Make sure you know them. All firms should include these in the proposal. And if they don’t do not be sheepish n your request for them. Also, once again, building relationships can strengthen future savings when fees for the audit firm increase.

4. Are you peer-reviewed?

A firm’s participation in the peer-review process is another factor in the reliability equation. Licensed certified public accounting firms must be peer-reviewed once every three years. Check the website of your state’s society of CPAs to find out if the firm has been registered.

5. Who is your typical client?

This should be more specific than a general industry category. Diversity is good. And something that should be more sought after. However, logically, it stands to reason that there will be  natural tendency to lean toward one sector or another based on audit experience.

6.  Size of firm?

A firm might not have enough CPAs to serve you efficiently if unlicensed professionals are doing much of the work. Firms with at least five CPAs are sufficient for most private companies. But efficacy of a firm is not the sum of its parts alone. Smaller firms are often times bring more value to the table as their fees are lower and their focus is more on doing a great job…... kind of like an underdog in a fight! They work with heart and are not so much part of the big machine.

7. When can we connect?

A good working relationship starts with a good first impression. Any firm that is worth its weight will go to great lengths to ensure that their best foot is put forward. There should be much interface in the beginning. Asking for a meeting or two will help in the stabilization of the relationship. And any audit firm knows this and invites this type of behavior. Make sure you take the time to meet with them and discuss your cares and concerns before you make your decision. A 15 or 30 minute conversation and secure the right firm.

The nuts and bolts of the whole thing:

All of the above mentioned are just some of the things to look for when make the decision as to which audit firm. Of course, the obvious reason is to hire an organization to protect your best interest as a company and protect and hopefully increase your bottom line. Of course, each company has other features that, if asked they are more than happy to share. But leading with these questions will not only guide the conversation in the right direction but will also reveal the integrity of the team. And that is truly what is at stake. The integrity of the audit team.  And with these guidelines, you will be able to know full well the audit integrity of your choice.

THE SCALES OF BALANCE OF AUDITOR INDEPENDENCE AND ADVICE

When taking on the responsibilities of accounting for a small business, accountants are often times worried about just keeping the fiscal records of the entity.  Small business has more than enough to have to worry about knowing the ever-evolving accounting and compliance standards that would apply to the audit process. The overarching arm of the SEC extends to even the smallest of businesses and if the truth be told, can destroy a small business/corporation in a matter of weeks. The scrutiny of an audit is one thing to understand. All of the ins and outs are too much for even a handful of people to grasp. And suffice it to say, a small business throws all of its energy into growing their business. And, there is always advice and assistance from  that is welcome accountants and the likes thereof. But it is without a doubt there is a fine balance between advice, assistance and auditor independence that is not only critical, but mandated for the audit process. And knowing this is the ultimate responsibility of not only the small business owner but largely the auditor. Any interaction, assistance or advice can, and will, be scrutinized. Independence is the key, and solid, reliable fiscal prudence the desired outcome.

according to a 2006 speech by a high-ranking SEC staff member: The basic consideration is whether, to a third party, the client appears to be (i) substantially dependent upon the accountant’s skill and judgment in its financial operations, or (ii) reliant only to the extent of the customary type of consultation or advice … The prohibitions on bookkeeping and management functions are not intended to discourage two-way communication between the audit firm and its audit client. (Michael W. Husich, Associate Chief Accountant, Office of the Chief Accountant, “Remarks Before the 2006 AICPA National Conference on Current SEC and PCAOB Developments,” http://bit.ly/2zpLdrd)

Probably the best available guidance as to the SEC staff’s general views, although unfortunately written specifically in the context of (but not limited to) Sarbanes-Oxley Act (SOX) reporting on internal control over financial reporting (ICFR) is this statement issued by the PCAOB staff:

The staff understands that management at times has hesitated to ask auditors technical accounting, auditing, and financial reporting questions [and] … that auditors also have a heightened concern that providing management with advice might impair the auditor’s independence.

The Commission’s auditor independence requirements with respect to services provided by auditors are largely predicated on four basic principles. [That is, 1) An auditor cannot function in the role of management, 2) an auditor cannot audit his or her own work, 3) an auditor cannot serve in an advocacy role for his or her client and 4) an auditor and audit client cannot have a relationship that creates a mutual or conflicting interest.] In addition to these four basic principles, the Commission’s rules also specifically identified nine categories of prohibited services. The auditor’s discussing and exchanging views with management does not in itself violate the independence principles, nor does it fall into one of those nine prohibited categories of services. The staff supports a strong audit profession where a hallmark of its professionalism is to exercise sound judgment in both the audit and in ongoing dialogue with management [emphasis added]. The staff recognizes that questions arise in certain circumstances as to the proper application of accounting standards. Investors benefit when auditors and management engage in dialogue, including regarding new accounting standards and the appropriate accounting treatment for complex or unusual transactions. The staff believes that as long as management, and not the auditor, makes the final determination as to the accounting used, including determination of estimates and assumptions, and the auditor does not design or implement accounting policies, such auditor involvement is appropriate and is not of itself indicative of a deficiency in the registrant’s internal control over financial reporting. [“Staff Statement on Management’s Report on Internal Control over Financial Reporting,” May 15, 2005]

The SEC press release that was accompanied by the foregoing PCAOB staff statement added that “as long as management determines the accounting to be used and does not rely on the auditor to design or implement the controls, we do not believe that the auditor’s providing advice or assistance, in itself, constitutes a violation of our independence rules. Both common sense and sound policy dictate that communications must be ongoing and open in order to create the best environment for producing high-quality financial reporting and auditing; communications must not be so restricted or formalized that their value is lost” (Release 2005-74, “Commission Statement on Implementation of Internal Control Reporting Requirements,” May 2005, http://bit.ly/2QUsWsT).

The once existent  ISB laid claim over standards and compliance issues that would face an audit scenario. However, it’s inefficiency was put to rest in 2001 with only three standards and one interpretation to its name. This point arises due to the fact the SEC chairman at the time saw major flaws in the fabric of the organization. Many corporate audits failed and corporations still found themselves without controls in place to more clearly define the authority of such organizations.

ENTER THE PCAOB

The PCAOB’s (Public Company Accounting Oversight Board) was established in 2002 by Congress, states  independence standards clearly set forth that under certain qualifying conditions, proposing audit adjustments (without regard to their number, nature, or significance) for review and acceptance by management does not impair audit independence (PCAOB Interim Ethics section ET .05.101-3).

The PCAOB asserts that the term “mis-statements” should be understood to include “omission and presentation of inaccurate or incomplete disclosures” [Auditing Standard (AS) 1301.18-19; 2810.2, footnote 13]. This supports the view that additions or editorial corrections to note disclosures are, in fact, audit adjustments “other than those that are clearly trivial,” and similarly must be communicated to audit committees as such (AS 1301.19).

The need for tighter controls by the SEC on audit assistance and adjustments dates as far back as 1957. And with the crash of ENRON, ARTHUR ANDERSEN AND WORLDCOM it was very apparent that something needed to be done to bring the gap without betrothing the process thereof. Auditors DO have the flexibility to work closely with the company as long as the accounting systems are approved by the company board and NOT the auditing firm.

“Specifically, questions have been raised in recent years as to the extent to which an auditor can assist an issuer client with the drafting or editing of note disclosures without being viewed as auditing his own work or “closely participating” by performing a management function. Since an auditor’s opinion is not piecemeal with regard to note disclosures, but rather applies to the financial statements (including the accompanying notes) taken as a whole, this author believes that assessing the effect of such drafting is rightfully a matter of degree—and also a matter of professional judgment.”- Howard B. Levy, CPA

The purpose of audit independence and accounting assistance and advice is to protect both parties involved. The controls put in place may seem a binding to firms and their clients, but like all things with rules and laws it ultimately creates challenge and growth. And growth and challenge always raises the bar for all to achieve a new level of excellence. The scales of balance must always be the utmost importance and always forefront of mind for these three reasons alone: 1) a clean conscious, 2) pride of the profession, and 3) the credibility of financial accounting and reporting!

FORWARD THINKING AND TODAY'S AUDITOR

It is a place of analytics, numbers and opinions based on calculated findings. With regulatory pressure growing and clients increasingly setting the bar higher, it is without a doubt that the life of today’s auditor is forever a balancing act. And as what was thought to be the “buck stops here” approach to auditing is now getting a fresh new life. And you had better welcome the age with open arms. It is the dawn of automation and artificial intelligence (AI). It is here and it is NOW. The auditing process is growing more intricate, and easier (if that makes any sense) every day.  Thanks to automation, it is easier to input a client’s entire general ledger through an automated analysis process using tools that perform a variety of functions. Those functions create lists of exceptions for the auditors to evaluate. This process replaces the task of sampling. Auditors are now warming up to the idea of the cloud as data storage. And all is good, but the news of the hour is this: AI and automation are here. Blockchain technology is right around the corner. And in order to stay up to date on the audit process, you must bring all you’ve got to the skills table. And that doesn’t just mean your analytical mind skill set. It means also you need to be able to explain the breakdown of it all. People skills. 

As we move into the “new age” accounting, we must be able to interpret and explain the haze of information that was once visual.  Being able to input large amounts of data more rapidly and present outcomes beyond just red flags for the client. We are seeing the early stages of predictability for business owners. This is where the strong analytical process must have a very strong marriage with the very articulate. Adaptability is a common theme for today’s auditor. To have it be said that it’s all a numbers game is a moot point. Of course it is. However, if analytical minds are not open minded enough to be forward thinking, then be prepared to be put out to pasture. The days of the forward thinking and analysis are very much codependent on each other.

Welcoming IT advances into the auditing process proposes exciting opportunities for auditors. It can give the audit process an entirely new shape. And explaining that new shape to the client it terms of their best understanding is vital to the health of the firm/client relationship. Along with providing software for the larger entities, new innovative technology is able to cater to the smaller clients with the same processes to create maximum future results with fewer discrepancies.  

Knowledge is certainly power and communication is key, so it goes without saying that this recipe is not only imperative to the benefit to the client, but crucial to the internal workings of the audit team as well. With new, and many times, younger, members of the audit team coming in, it is the responsibility of the more seasoned crew to bring all new players up to speed. Thus saying, the longer the time in the playing field, the more up to date on all of the new technology you had be acquainted with. Befriending a junior member of the team to present a researched and studied item at a staff meeting can encourage both tech and soft skills for all.

Embracing new things is always a hard thing for most of us. But in business, particularly auditing, it is increasingly vital to our existence on a personal level. Change is hard. Change is good. And as it grows exponentially so must we in our outlook and approach to our profession. It is job security. And looking at it from the birds eye level it is for the greater good that our knowledge is increased. That is how we become better people. For everyone. Embracing change and being a forward thinker. The time is NOW.

SUSTAINABILITY AND THE AUDIT PROFESSION

In the accounting world, the audit has always been an integral part of it. Much reference has been made to the adversarial relationship that often exists between auditor and client. It is everything the auditor can do to maintain the open lines of communication and trust that should exist between the parties. But looking closely now more than ever, sustainability will be the desired end result paired with technology and quality.

Now, looking forward, the profession must always be keeping up the open lines of communication. With automation, the onset of AI and blockchaining the auditor has the challenge of justifying their legitimacy.

There is a growing body of evidence pointing to the extinction of the auditor. With the aforementioned being in full play within the next decade, the auditor must bring a new set of skills to the game. Those skills are that of an analytical and technical nature coupled with soft skills creates a new fabric in the tapestry of the audit.

With the use of technology very much on the rise the wise words from Bill Gates are more true today than ever before. “The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” He is right. And with signs showing apparent that automation will certainly be mainstream, auditors must be looking forward with due professional care, inquisitive minds and of course, always leveraging and embracing new technology. But one thing holds true throughout the entire process: quality.

Quality in not only the processes involved, but quality in relationships throughout audit engagement. Quality is a culture that is built into the fabric of the hired firm.Quality in work, technology and relationship. Not just when the crunch of reporting is looming. Quality from the onset. It must be comprehensive and continuous. On the management level, members of the audit team must have the necessary tools, training and resources to perform the task at hand.

Innovation is forefront to the continued success of the auditors and their firms. Combining data analytics, technology, quality and purpose will change the traditional models to current more benevolent models of profitable sustainability. Companies now will be focused on the intangibles such as societal and environmental factors. And with larger companies growing at an accelerated pace, auditors bring more to the table that just the opinion of the audit. Now, more than ever the audit team must bring forth many proactive suggestions. Ones of interdependence, comradery, an ever growing desire for quality and purpose. Transformation of the new audit is for the open minded, well rounded audit team.

Longevity and sustainability rest on the perpetually educated. The audit of tomorrow will have a much different face than ever before. Sustainability will come when the firm embraces change and the open mindedness of welcoming the new age of audit.

FINANCIAL STATEMENT AUDITS: YOU DON’T KNOW WHAT YOU DON’T KNOW

Companies know the overarching pressures of an audit. Mention the word audit to folks and you will hear nothing but a sigh. But for every ying there is a yang. But there is always a silver lining. And so it is with the audit.

Audit insights provide not only errors and discrepancies but it can offer great benefits and opportunities for tremendous growth. Research indicates some surprising results. And the audit is in many of the instances the hero.

A recent survey conducted by an industry leader revealed of the about 300 executives surveyed stated they found opportunities to improve business performance. Included in this survey, were the opinions of about 100 audit committee members. They echoed the same response.

A common man can conclude that the quality of an audit is the barometer of the relationship between firm and client. Another conclusion one could draw is if the quality is good then there is trust on both sides. If there is trust on both sides there is communication. Communication is an opportunity to insight for growth. Growth is good.

If then, communication is an uncovered gem to the growth from an audit, one may ask if there is more than communication making way for growth for a company. Well trained auditors, audit committees, and management must have a plan of action when entering into the audit with the end result of growth potential. Thus presenting another key. Companies must not turn a blind eye to insights offered by the team players. Bigger thinking and open-mindedness are relatively new terms and schools of thought that should be embraced by companies facing the audit process. Change is hard but change is good. And growth comes from welcoming the change.

For all involved in the audit relationship, it is not just the company needing to be open-armed. The audit firm, almost always conveys the air of superiority. They must rely confidently on excellent service and a quality audit to reinforce the justification there of. These two things are cornerstones to extending the relationship through the years. Another benefit of a trusted quality audit.

Because communication is like energy: it just is. It can be used for good or bad. Positive or negative. How ever the good news of potential growth is offered is dependent upon how well the information is delivered as well as received. Always remembering “you don’t know what you don’t know.” Communication is key. Always.

WHEN THE BIG FOUR IS TOO MUCH

Being at the top is great. Competition and drive keep you there. But at some point in time the lead dog gets old. And if you are a younger work dog in the back of pack, it’s your due time, because even the lead dog has to retire; someday.

The Big Four have notoriously strong armed the audit world, providing 89% of the publicly traded companies in the U.S. and all of the major corporations in the U.K. with their mandated audits. So when do you decide to move your audit business to a smaller, more efficient and often times more specialized firm? When the big dogs no longer specialize in the area where you need them the most.

The Big Four firms have found it far more profitable to grow through acquisitions into other areas such as consulting and advisory services. Afraid of the saturation in the audit and tax market, the Big Four are broadening their services by acquiring smaller boutique companies with higher profit margins as a result of diversifying their business.

All of this is well and good but sometimes smaller is better when it comes audit. Smaller companies have the manpower to service large clients and still have a laser like focus on the audit relationship. They are not looking so much to scale but to do ONE thing well.

They also take very seriously their affiliations with organizations such as the PCAOB. The PCAOB is the oversight governing body that regulates auditor activity and compliance. Often time these smaller firms take their accolades much more seriously because there is more at stake for them. It’s the classic case of cheering for the underdog. When the cards are stacked against them, it is when the small guy shines. And, millions of dollars are spent every year on the Big Four fees when a smaller firm can do the same job, if not better for a fraction of the price. And, like any good company, the cost savings will be the tipping point to confirm smaller is indeed better.

So much is at stake when it is time for the audit. And with the Big Four billing out over half of their revenues in services other than audit on a yearly basis, isn’t it time to rethink who your audit relationship is with. Underdogs vs the Big Four. Don’t overlook the smaller firms in the audit process. Open a new, and welcoming door to a highly efficient new relationship with the small guy. Be pleasantly surprised by the efficiency and savings your company deserves!