AUDIT & ASSURANCE

How this one attribute strengthens others.

By Alan Anderson, CPA
Transforming Audit for the Future

“Far and away the best prize that life offers is the chance to work hard at work worth doing.” – Theodore Roosevelt

When you think about business leaders like Bill Gates or Reed Hastings, the founder of Netflix, it’s clear that these people did not create their empires by focusing on narrow measures like realization rates or increasing their profit margin. Neither of these organizations would have become the household names they are if their founders had had such narrow views, and if they had not been able to move these very large companies in new directions in response to changes in the world.

MORE: Are You Looking at the Big Picture? | Meet Your Client All Year, Not Just During Audit | Give Your Audit Teams Tasks That Increase Business Acumen | Are You Using the Right Business Model? | Give Advice While Remaining Independent | Stop Mixing Up Your V’s and Losing Your Best People | Empower Your Team by Dumping C and D Clients | The New Formula for an Accounting Business | How to Upgrade C and D Clients | Eleven Types of Audit Clients and Which to Fire | Don’t Risk Losing Good Employees for Bad Clients | Can a Service Center Model Solve Audit Staffing Shortages? | Don’t Take on Audits in an Industry You Don’t Understand | Four Questions to Make Your Firm More Successful as a Business
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Business-mindedness in audit has deeper dimensions than making a reasonable profit and delivering an audit report on time. Even if you’re not concerned about the future of audit, strengthening the attribute of business-mindedness in your firm will strengthen your firm and make it more attractive to clients and team members. Let’s talk about some of the tangible benefits.
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Reinforce the teaching in every experience.

By Alan Anderson, CPA
Transforming Audit for the Future

Another method for ingraining a business-mindedness attitude into the culture of the firm is to treat every experience as a learning opportunity. Partners take staff accountants to lunch with clients all the time, and the three of them talk business. But most partners never do anything with that experience. A better approach is to have a follow-up meeting where the partner asks the staff accountant questions about what they heard and what they learned during the conversation. This could even be on the car ride back to the office.

MORE: Meet Your Client All Year, Not Just During Audit | Give Your Audit Teams Tasks That Increase Business Acumen | Stop Mixing Up Your V’s and Losing Your Best People | How to Upgrade C and D Clients | Can a Service Center Model Solve Audit Staffing Shortages? | Move to Advisory and Assurance with Relevance | Use Eight Audit Exit Items to Deepen Client Relationships | Know Your Three Audit W’s | Planning Lays the Foundation of Audit Relevance | Are You Correctly Identifying the Relevance Intersection? | Traditional Audits Don’t Deserve Premium Billing
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Business-mindedness means we take seriously the development of the talent in our firms so that what we reward is business acumen, having great conversations with clients and with the team, and coming up with valuable advice for the clients. But instead, what many firms value is the chargeable hour. They don’t want to take the time out of chargeable hour budgets to have those conversations or to reinforce the learning from meetings with clients.
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Will there be more work? Most likely.

By Alan Anderson, CPA
Transforming Audit for the Future

When you’re a client-serving firm, the service doesn’t end with delivery of the financial statement audit. Client service should be perceived as a continuous, ongoing process that is supported by the culture with accountability measures. Client service is a relationship that is developed by habit.

MORE: Give Your Audit Teams Tasks That Increase Business Acumen | Are You Using the Right Business Model? | Empower Your Team by Dumping C and D Clients | Eleven Types of Audit Clients and Which to Fire | Don’t Take on Audits in an Industry You Don’t Understand | How ‘Business Expert CPAs’ Get Their Own Business Wrong | Exceptional Audit Client Service Demands Effective Communication | Five Ways to Prevent Audit Bottlenecks
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CPA firms tend to get bogged down in the work, so I developed a process for developing those relationships. I would sit down with the team and tell the senior accountant and the manager that they needed to meet at least quarterly with their counterpart at the client. The senior would meet with the controller. The manager would meet with the CFO. My responsibility would be to meet with the CEO or the business owner. These meetings could be phone calls but at least one of those meetings would be for lunch. If they desired, the senior and manager could have a joint lunch meeting with the controller and the CFO.
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Audit partners seeing modest optimism across companies.

By CPA Trendlines Research

Auditors have a special sense of what’s happening in American business. They see the numbers that others don’t. They prepare their firms and clients for what’s to come.

This year, audit partners are sensing a guarded confidence in the economy, albeit with considerable nervousness about the geopolitical situation, according to the Center for Audit Quality’s 2024 Audit Partner Pulse Survey.

MORE: Ten Ways to Manage Price Increases | Survey Says 57% of Firms Are Raising Prices Next Year | Twelve Years and Out: Seasoned Accountants Join the Exodus | Survey Shows Big Opportunities in Small Business | The Slow, Painful Death of the 150-Hour Rule | Partners: Your Middle Managers Are Getting Squeezed | In-Person Conferences Still Essential | Accounting ARC
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Geopolitical Instability

For the first time, geopolitical instability ranks in the top five economic risks facing companies over the next 12 months.

In fact, it ranks third, a fear substantially more serious than that of cybersecurity and rising interest rates.
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