Business - FDs shop for auditors, reports John Stokdyk
Finance directors are more like supermarket shoppers than hard-headed businessmen when it comes to choosing an auditor, according to a new study from the English ICA.
The study, ‘What Companies Want (and Don’t Want) from their Auditors’ interviewed over 200 FDs and identified what drove them to consider changing auditors. The top ‘grumble’ was fee levels.
ICA council member and report co-author Stella Fearnley said, ‘Like people pushing trolleys around supermarket, some clients have a list of what they want and some wander around looking at the shelves.’
As a result of auditing services shifting from a sellers’ to a buyers’ market, auditors had to identify clients’ characteristics to ensure they continue to meet their needs, she added.
The report categorised clients into four groups. Grudgers see little value in audits and are attracted by low fees. Status seekers typically look to bigger firms to lend them extra credibility. Comfort-seekers value auditors as a confidential sounding-board, while resource-seekers look to them for business ideas and non-audit services.
Though fee levels were cited most frequently, Fearnley said the auditor-client relationship was more important. ‘People don’t change auditors for the hell of it; they’ve got to have a very good reason. If it’s just a matter of the fee, all they’ve got to do is renegotiate.’