FDs unhappy with audit work

FDs unhappy with audit work

Audit quality down but fees up, according to Independent Audit chief executive

Jonathan Hayward

Independent Audit CEO Jonathan Hayward

Relations between finance directors and auditors are becomingly increasingly
strained due to rising fees but falling service quality, according to one of the
UK’s largest audit industry specialist.

Speaking during Accountancy Age’s
Insider
Business Club
conference, Jonathan Hayward, chief executive of
audit consultancy Independent Audit, said that FDs have faced rising audit fees
but reduced service quality, which has increased tensions between the two
sectors.

‘One thing that I’m hearing is that auditors are spending too much time
sitting in front of their laptops, dashing away at something, rather than
getting out and talking to clients, which they don’t understand,’ said Hayward.

He said that audit firms rest ‘very heavily’ on inexperienced labour who do
not tend to ask questions, and are not ‘kicking the tyres’ and understanding
much about the way management thinks and functions.

ACCA head of audit practice David York is more confident in the relationship
between auditors and businesses: ‘The feedback I get is that, in fact, boards
and auditors are quite often of one mind, and the party that is out of step, is
the investor community.’

Ian Plunkett, business assurance partner at BDO Stoy Hayward, said the
collapse of Andersen was a ‘watershed’ for the relationship between client and
auditor. He said that larger audit firms in the US have been shedding clients
that do not fit into the ‘necessary risk profile’, although this situation has
not reached the UK.

Plunkett said auditors must understand the people and processes of their
clients, not just focus on the numbers.

Go to
insiderbusinessclub.com to
download our weekly web conference podcasts, or listen live to the discussions
at 11am every Wednesday.

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