Having spent more of my career being audited, rather than being the auditor, I always had mixed feelings when I received a clean audit report where they hadn’t found any material issues.
The anticipation builds as you approach the bid, and the last thing you need is for the auditor to come up with any problems, especially ones that are your fault! So a clean audit report is a lovely thing.
That nagging feeling that if they didn’t find anything, were they really looking very hard? Can we sleep soundly at night knowing that if there was anything sinister lurking in the model that it would definitely have been picked up?
Sometimes you get hundreds of issues, none of which are material, but as they keep being raised, you keep needing to resolve them to keep the client and the bank happy. This can keep you stuck in the weeds at the very time you need it least.
Other times, you get no engagement and a handful of immaterial points, and a general unease that they haven’t really looked at the model at all.
It is interesting that in the auditor’s position, one does feel a lot of pressure to find issues whether they are material or not.
You want to be creating a long list to show to everyone that you are doing a great job. But I’m also acutely aware that this could be creating extra work and pain for our clients, where the points are not hugely material.
It is our job to find the right balance between giving our clients the assurance and confidence they need whilst not getting in the way of the transaction.
Our solution is to speak to our clients and discuss up-front what they want to see and how they want to operate. We are very clear on the materiality of points and ones which need to be rectified, vs ones which are ‘nice to have’ given the luxury of time. We can even agree to keep immaterial points to ourselves and not distract you with them.
This way you can get a clean report but without the nagging doubts we have not done a thorough job.
Please let us know about your experiences by contacting us today.
Do you find yourself drowning in detail? Or do you worry that if nothing has been found that the auditor hasn’t been trying very hard?
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