Auditor Continuance: An Annual Question, Not an Annual Change [SUBSCRIBERS-ONLY]

The question of how long to continue with the same auditor is often sitting somewhere off the radar screen. This is both the problem and the answer. The process of asking and answering the auditor continuance question should be part of the audit committee’s standard operating procedures and a standard annual checklist item for the audit committee.

As we discussed in Q&A #18, there are two key considerations to balance. On the one hand, you do not want to change auditors too often, particularly not every year. On the other hand, you want to avoid using the same audit team forever. There is a big gray area between every year and forever.

The solution to this dilemma is to define criteria for auditor continuance that works for your organization, aligns with generally accepted best practices, and honors transparency. These criteria should be formalized in your audit committee’s standard operating procedures.

The following guidelines will satisfy most needs and issues related to addressing auditor continuance.