How Do I Choose the Best External Auditor?
There are a few factors to consider when choosing an external auditor, and the most important of these is his or her qualifications. Other considerations include reputation, past experience, and the staff with which he or she works. Selecting an external auditor can mean using a tender and bid system, so once you have a few candidates in mind, you have the option to invite them to submit a tender.
When choosing an external auditor, you should look for someone who is qualified to carry out the audit. This will be someone who is either a certified public accountant (CPA) or someone who is registered with an organization, such as the Association of Certified Chartered Accountants (ACCA). Research the licensing or registering bodies in your country to ensure that the auditor you choose is registered with or licensed by them.
It is also best to choose an external auditor or auditing firm with a good reputation. If an auditor or auditing firm has had negative feedback from clients, it is usually a sign that you should avoid the auditor or the firm. A little investigation of the individual or company you would like to use for the audit could save a lot of potential frustration.
Past experience is another important consideration when choosing an external auditor. The more experienced he or she is, the smoother you can expect the auditing process to be. It's also useful to look into the kind of companies the auditor has dealt with in the past to get some idea of the types of audits and companies he or she is used to dealing with.
Should you choose an auditing firm, look into the qualifications of the staff working with the auditor as well. Some of the administrative duties during the audit process may be passed on to support staff, so the qualifications and experience of those staff members could influence your experience with the auditor or auditing firm you choose.
The best way to choose an external auditor is to choose a few potential candidates and to then invite them to tender and bid on the audit. It is best to include a detailed report of the audit requirements and of the company. The report should include information on what kind of business your company engages in, and the kind of audit needed. The company's audit controls, management and administrative procedures should also be outlined so that the potential auditors have a better idea of what the audit will involve.
In some cases, an external auditor can be appointed by examining the tenders or bids received. Other times it may be necessary to have in-person interviews. This usually happens if further information is needed or if a decision cannot be made by examining the tenders received. In-person interviews lengthen the process but do allow you to ask additional questions before you decide to hire.
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