Looking to start a relationship with an audit firm to implement annual financial audit of a pharmaceutical manufacturer that has been around for 30 years. Revenue growing exponentially, $16M to $19M to $30+M in the next 24 months. Where do I start looking and how do I interview these firms to ensure the right fit?
How to shop for audit firm?
Answers
You will have to define the requirements of your Audit. As in, what you want to get Audited.
There are different types of internal financial Audits that can be carried out:
1. Audit of Business Processes
- Business Processes are comprised of two different kinds of Controls - Automated (System generated controls, check points and processes) and Manual Controls. These controls are basically of two natures - Preventive and Detective Controls.
- You need to identify what is your internal process and if your prospect Auditor has such knowledge about processes to be implemented, types of controls and tools to measure such controls.
2. Audit of Financial Transactions
- Whether you conduct audit for business processes or not, Audit for Financial Transactions is a must. Depending on your system audit results, the volume here gets varied.
- To audit financial numbers or transactions, the auditor must be aware of the business processes from root. As it is not just about supporting evidence, it is about understanding of your business process, business nature, industry behavior and industry knowledge. As supporting vouchers and documents can be created or manipulated but if one has a knowledge of the process, nature and the complexity of business for all types of transactions, the audit becomes easy.
So typically, your prospect auditor should have knowledge of:
- Industry of your business
- Industry behavior and standards of similar business in the similar industry and similar geographical location
- Importance of Business Processes.
- Technology (IT) - If you have implemented any automated business process tools or ERP
- Many other aspects.
Based on your business and what you need to get audited, you need to prepare a questionnaire.
Let me know if this helps. You can always contact me here or on my personal email ID at [email protected]. I will be happy to help you in assisting of selection of right Auditor.
I, personally, have worked with PWC as Auditor for more than 6 years and I can help you with my auditing experience and even we at FlowRocket also provides Auditor, Reviewer and part time CFO services to such fast growing businesses.
Filed Under:
Accounting