Guidelines to a Reliable Auditing Firm in India

An audit is an independent evaluation and verification of the records maintained by an organization as to their compliance with the relevant rules and laws of their country. In India, audits are normally of two types; statutory audit and internal audit.

In order to conduct a statutory audit, an auditing firm is hired by the company and its directors. As per the provisions of the new Companies Bill 2012, the appointed auditing firm can hold office for a term not exceeding five consecutive AGMs. Hence, it is very necessary to appoint a reliable auditing firm for the purpose. Following are some criteria that should be borne in mind while selecting the auditing firm.

• Competency

How competent is the relevant auditing firm again depends upon three factors and they are:

Size of the firm: Large sized firms have a larger and diverse workforce and can provide varied pool of talent to cater to the differing requirements of each organization. They are one of the leading international tax advisors besides providing services in company audit. Smaller audit firms may provide niche services or cater to smaller businesses.

Experience: It is necessary to know the type of clients handled by the auditing firm. If they have handled clients who are in businesses similar to your own then it will be more helpful.

Continuity of Staff: Any auditor who comes from the auditing firm has to get acquainted with the company’s processes and procedures. It would again be helpful if the auditing firm assigns the same staff for subsequent years so that the company doesn’t spend additional money and time on retraining the new audit staff.

Quality Control: The audit firms have their own training programs for development and training of their audit staff on various documented processes and systems to be used while conducting their audit. The training program given to ensure quality work on the part of their staff has to be looked into.

• Strategy

Mix of Team: In case of a large audit firm there would be various levels of hierarchy; audit partners, senior auditors and junior ones. Knowing the number of hours spent by each level on the audit work of the company will be crucial as that will decide the expertise and experience that will come to your job.

Methodologies and strategies: Several approaches are adopted by different audit firms while pursuing their audit work. Some offer risk-based approach or substantive or others provide value-based approach which emphasizes on advising areas of improvement and so on. Moreover, in a reliable audit firm partners working on a particular client are rotated after a couple of years or in others the audit work is reviewed by another partner.

• Cost

The same audit firm is continued for a multi-year period and the audit fees are decided for a set amount. These are increased by a determined rate in subsequent years to account for factors such as inflation etc. A reliable auditing firm will provide quality services and enhance the working of the relevant organization through their value-based approach.

As such there are various audit firms offering internal audit consulting Mumbai as well as besides providing other services which are needed for successfully conducting statutory audits of different organizations.

Resource Box: It is very essential for you to choose a management audit services, India for conducting your organization’s audit. Astute Consulting is one such firm which offers services in this regard.