It’s easy to lump the entirety of the financial executive experience into a single paradigm, not including critical factors like industry, size and resource availability.
That’s why measuring the audit marketplace strictly in terms of how it impacts public companies would be mistaken, even if registered public companies face the lion’s share of regulatory and stakeholder constraints.
That’s why the 15th Annual Audit Fee Survey & Insights, being released this month by the Financial Education and Research Foundation (FERF), has expanded and incorporated private company audit perspectives into the final report.
From implementing new accounting standards to navigating audit complexities without the rigorous internal controls of public companies, private entities demonstrated resilience and adaptability.
New Accounting Standards Are Driving Private Company Audit Effort
Unlike public companies, which adopted many accounting standards earlier, private entities continue to face resource constraints in adapting to these changes. Almost half of respondents to the forthcoming survey cited new standards as a top factor impacting their audit efforts.
Managing Costs and Scope
Audit fees for private companies saw moderate increases, reflecting inflation and heightened demands from auditors. A notable difference from public companies is the approach to internal controls. Without the robust and mandated frameworks, private companies often experience longer audits. However, these increases remain more contained than those observed in public company audits.
Looking Ahead
Private companies face a pivotal year as they adapt to evolving standards, audit demands, and technological advancements. By leveraging proactive strategies and fostering collaborative relationships with auditors, private entities can navigate these challenges while maintaining financial reporting quality.
Join me for the
Measuring the Private Company Audit Market webinar on December 19 with Dave Burk, Vice President and Corporate Controller at BCS Financial Corporation and Dillon Papenfuss, Director of Research at FEI.