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AUDIT & ASSURANCE

How Do We Drive Relevance in Audit?

The insights you deliver don’t just add value to the client but also result in a better audit. 

By Alan Anderson, CPA
Transforming Audit for the Future

Business owners and organizations typically regard the annual audit as a cost or “a necessary evil” that adds little or no value to the business. In contrast, auditors routinely say that their audit is different and absolutely does add value to the company or organization. To be sure, all audits have a purpose, as they are generally required to maintain financing or to meet regulatory requirements. But is the auditor genuinely adding value?

MORE: Before the Audit: More Than Just Planning | Are You Correctly Identifying the Relevance Intersection? | Lack of Relevance Drives Audit Commoditization | Five Crucial Attributes for Successful Audit Leadership | Traditional Audits Don’t Deserve Premium Billing | Four Basic Understandings Every Auditor Must Master | Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | WANTED: Great Audit Mentors | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
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There are numerous dictionary definitions of “value,” all centering around the concept of something being useful. “Adding value” should then mean making something more useful.  When you plan an audit, are you thinking of ways to make the audit more for your client? You will only convince your clients that you deliver value when you back up your words with action.

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AUDIT & ASSURANCE

Before the Audit: More Than Just Checklists

Effective inquiry starts with knowing how to ask the right questions.

By Alan Anderson, CPA
Transforming Audit for the Future

To weave relevance into the fabric of your firm culture, your team must shift from just getting the work done, with relevance as an afterthought, to putting the client at the center of the audit. That starts by building a foundation with the four U’s of understanding your client, the industry, the standards and how to audit.

MORE: Are You Correctly Identifying the Relevance Intersection? | Lack of Relevance Drives Audit Commoditization | Five Crucial Attributes for Successful Audit Leadership | Traditional Audits Don’t Deserve Premium Billing | Four Basic Understandings Every Auditor Must Master | Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | WANTED: Great Audit Mentors | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

To master these, you first need a natural sense of curiosity. Out of curiosity comes inquiry. We’ve all been taught that inquiry is one of the fundamental components of the audit process. But too often, inquiry doesn’t go any further than getting some answers to the questions on a checklist. And too often, those questions are the same ones that get asked at every audit engagement. The client has probably heard them (and answered them) more times than you can imagine.

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AUDIT & ASSURANCE

Are You Correctly Identifying the Relevance Intersection?

You may be prioritizing the wrong factors. That could cost you clients. Worse, it could make you and your audits irrelevant.

By Alan Anderson, CPA
Transforming Audit for the Future

If we can’t demonstrate to our clients that our work is relevant, then the audit will go the way of the dinosaur. Relevance underpins the other attributes.

Relevance is not a one-time event. It’s a continuous process, woven through everything your firm does. You build it one step at a time. This should be done with every audit, so this becomes core to the fabric of the firm’s culture.

MORE: Lack of Relevance Drives Audit Commoditization | Five Crucial Attributes for Successful Audit Leadership | Traditional Audits Don’t Deserve Premium Billing | Four Basic Understandings Every Auditor Must Master | Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | WANTED: Great Audit Mentors | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Without understanding what’s relevant to the client, we can’t practice business-mindedness and help improve our client’s business. With an understanding of the relevance and how the standards impact the client’s business and industry, the quality of audits goes up. Relevance helps you evaluate innovative audit methodologies because you understand how they can be used to obtain the required audit evidence. Finally, relevance empowers your staff to do their best work because audit isn’t reduced to filling out endless checklists.

But what does relevance mean?

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AUDIT & ASSURANCE

Lack of Relevance Drives Audit Commoditization

Premium service providers collect premium fees.

By Alan Anderson, CPA
Transforming Audit for the Future

We are all willing to pay more for something that has been custom-created just for us or when we see that the service provider has gone above and beyond to deliver additional value for us. But without relevance, there is little chance that your clients will see any additional value in the audit. For the client, the only reason to get an audit is to meet a regulatory or banking requirement.

MORE: Five Crucial Attributes for Successful Audit Leadership | Traditional Audits Don’t Deserve Premium Billing | Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

As a profession, our actions have contributed to commoditization, but every CPA firm I talk to complains about how audit is becoming commoditized. When someone complains to me about commoditization, the first thing I ask is, what do you do when you’re under a little fee pressure from your client? Oh, lower my fee. So, why are you lowering your fee? Because quite often, whether you’re thinking about it or not, you probably haven’t delivered anything more than 24 pages with an audit report on it.

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AUDIT & ASSURANCE

Five Crucial Attributes for Successful Audit Leadership

As CPAs, we exercise due professional care in all we do. When we perform audits, the bar is higher.

By Alan Anderson, CPA
Transforming Audit for the Future

In my work with auditors around the country, and as I’ve thought about where audit is headed, I’ve developed a framework of five key attributes of successful leadership for audit. If we focus on these five attributes, I truly believe we can transform audit from the checklist exercise that it’s becoming into a service that genuinely adds value to our clients.

MORE: Traditional Audits Don’t Deserve Premium Billing | Four Basic Understandings Every Auditor Must Master | Put the Ethics Code to Work for Your Clients and Your Firm | Turning Audit & Accounting into Assurance & Advisory | WANTED: Great Audit Mentors | Is Audit in Crisis Because of Definitions? | Stop Sending the Wrong Message to Audit Teams | Closing the Audit Expectations Gap
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

Let’s look at each of these five crucial attributes of successful audit leadership:

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