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While the external auditor has a responsibility to maintain objectivity and independence during an audit, the audit committee is also charged with several responsibilities. Overall, the audit committee must oversee the external auditor and the quality of the auditor's work. Specifically, only the audit committee can negotiate and agree upon audit fees, determine the scope of the audit work to be performed, and make recommendations and appointments of auditors. Audit committees should also report results of quality inspections of the auditor performed during the period. Finally, the audit committee should disclose and document its assessment of the effectiveness of the external audit process. This is an important aspect of corporate governance and can help ensure that the auditor is held accountable for the work performed.

When selecting an external auditor, it is important that the audit committee or those charged with governance consider factors such as: the auditor's experience and technical expertise, how the audit report will meet needs of the shareholders, and the timing of the audit. During the audit, the committee should consistently communicate with management and the auditors as this will help influence the overall efficiency and effectiveness of the audit. The auditor will communicate items such as auditing and accounting issues that arise in reports to those charged with governance.

After the audit, the audit committee should assess the quality of the auditor's work. The committee can inquire with management or key employees that worked with the auditor to assess performance. Also, the audit committee can measure quality based on the delivery date of the final audit report. Finally, the committee can assess quality based on how the final audit report will add value to the company. For example, industry-specific metrics and supplementary information could be beneficial to stakeholders and other interested parties. In many cases, the auditor may offer additional services or resources for future transactions.

For more information or questions on this topic, please contact your professional at UHY