Effective audit teams, like Withum’s, are effective for a reason. Last year, Accounting Today acknowledged Withum as one of the top 25 accounting firms in the U.S. So, when it comes to audit engagements, many are curious about the secrets to Withum’s success. You might think their success relies on technology or advanced auditing techniques, and the firm makes good use of both of those. But, Partner and CIO, Jim Bourke, revealed that Withum’s effectiveness is rooted in practical, firm-wide habits. He shared those best practices in a complimentary white paper from Wolters Kluwer.
To improve efficiency and audit quality, effective audit teams should adopt these six best practices:
- In the first place, train and retain staff.
- Secondly, know your client and your industry
- Thirdly, standardize and automate your end-to-end workflow
- Fourthly, define the audit review process
- After this, ensure client readiness
- Last but not least, leverage data analysis
Get your complimentary copy of 6 Habits of Highly Effective Audit Teams for a deeper review of Withum’s success factors.
Effect audit teams train staff
To begin with, you must hire smart, expert auditors to build an effective audit team. However, finding talented professionals is the number one challenge facing many accounting firms. Once you find the perfect skilled professional, you will want to retain them as long as possible. The best way to retain staff is to train staff. Accordingly, Withum devotes a lot of time and resources to engaging and developing their young staff members. With this in mind, “we train them from day one with an onboarding training that includes everything from audit to tax to technology,” Bourke said.
Know your client and your industry
Effective audit teams know that only deep knowledge of each client’s business and industry will yield an appropriate audit plan. Particularly, it is hard to properly identify risk if you lack good client engagement. While Bourke suggests conducting a brainstorming session at the beginning of each year’s engagement, he thinks it’s essential to involve a partner. Further, he explained, “the partner was responsible for landing the client and the initial relationship with the CEO and CFO…The partner is super key for knowing the client and the industry.” In fact, Withum’s audit process requires the partner to attend brainstorming, even if they are away and must attend remotely.
Standardize and automate the end-to-end audit workflow
Another key to effective audit teams involves everyone knowing what to expect from each engagement. Withum standardizes binder templates and workpaper templates for each industry. Not only does this infuse consistency across audits, it also helps during the onboarding of new team members.
“Wolters Kluwer provides the foundation of templates that are industry-specific. We then spend a significant amount of time upfront during the summer months refining our binders by industry. We have our industry groups, plus the young staff get immersed in an industry and learn the high-risk areas,” said Bourke.
Define your audit review process
Before starting any audit, effective audit teams establish who will be responsible for reviewing and they build a schedule for reviews. At Withum, this planning takes place during the initial brainstorming session. Not only does the team determine who will review and when, they also decide what staff level should review, based on the client and risk. Bourke explained, “In the brainstorming session, we identify
the high-risk areas and which staff will run with the high-risk areas, which are the most senior members on the staff. They spend their
time in the high-risk areas and stay out of the non-high-risk areas, allowing other staff to concentrate on those.”
Effective audit teams ensure client readiness
Going into the field, when necessary, to audit an unprepared client is one of the surest ways to erode audit profitability. Instead, Bourke suggests that firms have client readiness policies. In particular, Withum provides clients with request lists and schedules the fieldwork only after a client is ready. Accordingly, effective audit teams should also complete as much work on the audit as possible before going into the field.
Leverage audit data analytics
Undoubtedly, the use of audit analytics truly sets the most effective audit teams apart from the rest. That’s because analytics not only improves audit quality but also reveals important business insights that deliver added value to clients. Additionally, the AICPA continues to pursue audit quality initiatives that encourage firms to incorporate audit data analytics throughout the audit workflow. Withum employs a number of analytical and data extraction tools that result in “more efficient and better audits,” however, Bourke cautions that firms need a lot of staff training to ensure these tools get used effectively.
Build more effective audit teams within your firm
There’s more detail about each best practice in the white paper, as well as examples of how Withum uses them. Additionally, there are tips to help firms incorporate the practices into their own audit workflows.
Get your complimentary copy of 6 Habits of Highly Effective Audit Teams to learn more. Plus, check back next week to discover how Withum increased audit quality by employing Wolters Kluwer’s Integrated Audit Approach.