Financial executives feeling the pinch from the audit process can take several proactive steps to temper the sting of rising fees, according to a report released today by the Financial Executives Research Foundation (FERF).
According to the Mitigating Increases in Audit Fees report, sponsored by Workiva, CFOs, chief accounting officers and controllers should focus on seven key areas surrounding the audit process ranging from automating internal control processes to hiring the right support staff.
“Regardless of regulatory requirements, business structure changes, inflation in the current business environment, or other factors that can drive up audit fees, many companies are finding ways to work with their auditors to mitigate fee increases,” the report states. “While it may be a common perception that audit firms want to bill as many hours as possible, we find that most auditors want to work efficiently with their clients.”
Earlier FERF research found that while audit fees were on the rise in 2015, more than 40 percent of financial reporting professionals maintained flat fees or decreased their costs.
A few of the seven steps financial executives can take to hold the line on audit fees, according to the report, include:
- Centralize audit footprint because “the more centralized the audit function, the more efficient the audit was.”
- Automate the internal processes as much as possible, including account reconciliations and internal controls.
- Review audit hours and fees and don’t be afraid to “push back.”
“While some of these tasks may be easily attainable, others may require more thought, and some may require a capital investment,” the report concludes.
For the full report, including detailed interviews with financial executives and audit professionals about effective cost-containment strategies, click on the banner below.•