US Firms Reveal Best Practices for Audit Efficiency
The AICPA's Journal of Accountancy has a feature in its September issue in which firms cited for their excellent quality controls share practice tips on how to improve audits while saving time and enhancing profits. There is probably something for most practicing accountants here, and many well-organized firms will find much familiar ground.
The first step towards audit efficiency is to manage and train clients. Auditors work best when clients provide them with the data they need. Many firms have different strategies for educating their clients about their needs, but most such strategies pay off.
As one might expect, retaining clients and staff can also increase audit efficiency. Firms found that greater familiarity with a practice area and a client enabled them to streamline their audit approaches and make the most of the time spent on each engagement.
Planning is critical to audit efficiency. The more effective firms actively seek out past inefficiencies and possible improvements, rather than letting the audit team repeat last year's errors!
The survey also found that correlating audit efforts to the levels of risk and materiality helped increase efficiency. Effective firms try to limit procedures in low-risk areas and focus their attention on trouble spots. Use of appropriate standard audit procedures and programs can aid staff training and discipline in this area.