How to choose the right statutory auditor
Is it time for your company to conduct a thorough financial audit? Many entrepreneurs wrongly associate financial audits with something particularly unpleasant. In fact, examining the financial capacity of your company is a great chance to learn about your company’s strengths, plan next steps, and limit unnecessary expenses which may impede business growth.
An accurate and thorough audit which can work for the benefit of the company requires hiring an experienced statutory auditor. What should you know to find the right auditor and what should the recruitment process look like?
The job of a statutory auditor
A person with the power to conduct financial audits for a company is called a statutory auditor or simply an auditor. Their main task is to oversee financial statements prepared by accountants. They are mainly responsible for making internal evaluations which can clearly and precisely determine the transparency of various financial activities conducted by the company. Auditing assesses whether all activities are conducted in accordance with the law.
How to choose a statutory auditor?
A specialist responsible for conducting financial audits must be a trustworthy person. A statutory auditor is bound by confidentiality. Neither company-related information nor company financial documentation may be shared with third parties (there are exceptions to this rule by law, for instance if the information constitutes crucial evidence in a court case).
A statutory auditor must be chosen early enough to be able to prepare for the tasks assigned to them and conduct all necessary analyses without time pressure. A statutory auditor must conduct a preliminary examination in order to plan their work. For this reason, audits should not be put off.
Pricing also matters – it should be relevant to the scope of services provided by the auditor. If the pricing is too low for the amount of work required or if they are willing to spend very little time on the audit – maybe you should reconsider hiring this particular auditor. Remember that you always have the right to ask about the scope of services provided by an auditor, and the basis for price calculation.
You have to make sure that the statutory auditor that you are considering is the right person for the job. Not all statutory auditors are independent and impartial enough to conduct audits accurately and objectively. Knowing your candidate’s previous experience in conducting financial audits should help you make the decision. It’s worth asking them how many audits they have conducted and how well they know their field of expertise. An auditor must be able to estimate not only the specificity of a particular company but also their financial capacity, as well as any possible risks ahead.
The final choice of the statutory auditor must not be left to chance. It would be best if the entire hiring process was overseen by the whole management board of the company, and not just one person. An active participation of the most important people in the company will ensure making the best choice possible. In the end, the audit must be conducted in a professional, accurate and reliable manner.
A statutory auditor – the right person for the job
A good auditor remains impartial and objective at all times. They are competent accounting supervisors, able to correctly read and interpret financial statements, know their field of expertise well, have a wealth of experience, and demonstrate their expertise in economy, taxes, and crisis management. Choosing the right statutory auditor should not be rushed as the overall result of a financial audit and the company’s future will depend on this very decision.