April 11, 2018
by Jason Cope
As a manufacturer, you need auditing and assurance services professionals who can partner with your team to identify risks in your manufacturing operations, spot inefficiencies in your financial reporting processes and improve overall business performance.
How should you go about the process of choosing a manufacturing CPA audit provider? Here are four considerations to keep in mind.
- Look Beyond the Price
Let’s say you are getting a handful of proposals from CPA firms to do the work. One is quite low, and that has your attention. However, you’ll need to dig a little deeper to get the full picture. What are their hourly rates? How many working hours are involved? What might seem like a great deal may end up costing you more if the bid is calculated on fewer hours than what’s needed to get the job done.
- Meet the Auditing Team
Whether you have several bids out or are getting word-of-mouth recommendations, make sure you meet with the team members who will be assigned to handle your business. While it is common to first meet with the partner in charge of the team, you’ll want to gain a good sense of the audit professionals who will be working with you.
When you’re bringing in outside experts to examine your operations, you want a team you can trust. Remember, they will be doing a deep dive into your books and records. You’ll want to make sure their cultures blend well with yours. Additionally, make sure your auditors can communicate clearly—there may be a need to explain complex information in a straightforward way—and that’s not always easy to do.
- Industry Experience
Let’s face it; there’s a big difference between auditing service-based companies and manufacturing companies. Make sure your auditing and assurance team truly understands manufacturing operations. When assessing their strengths and weaknesses, ask:
- Do they have manufacturing industry expertise?
- Are they asking the right questions to learn about your operation’s activities? (You have a right to expect auditors who understand the nuances of your business.)
- Can they respond to your deadlines in a timely fashion? (You want to be sure you will get the attention your manufacturing business warrants.)
- How long will the auditing team need to be onsite? (You want minimal disruption to your daily operations.)
Your auditors will perform tests on your company’s financial statements to determine that your financial statements don’t include material misstatements, which could result from error or fraud. Hire a team experienced in testing inventory balances using generally accepted auditing standards(GAAS).
- Forward-thinking Expertise
Your auditing team offers an outside-in perspective, which can be very beneficial to your organization.
When you are looking for manufacturing CPA audit and assurance services, you want to trust that you have the right partner. In addition to establishing reporting credibility, your auditor should also examine the economic indicators that may have a sharp impact on your industry, especially during the audit period.
Your audit partners should have a full understanding of any current or future risks that will have a bearing on your business’ financial performance.
Finally, remember it’s not just about the numbers. Your audit team should review best practices to improve your bookkeeping and financial controls and make recommendations for ways in which you can improve your profitability.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.