Cutting External Auditing Fees 653
Connie last edited by
I work in internal auditing and my company is aggressively looking for ways to cut the fees that our external auditors will be charging for SOX work. One suggestion being mulled over is to have our internal audit team temporarily work directly for the external auditors. This means that the internal audit team will do most of the field work with the documentation being reviewed by the external auditors, and the internal auditors will be 100% supervised by the external auditors. %0AHave any of you encountered similar types of situations? How has your company addressed ways to reduce audit fees stemming from the additional work caused by SOX?
Denis last edited by
I work in internal auditing and my company is aggressively looking for ways to cut the fees that our external auditors will be charging for SOX work. One suggestion being mulled over is to have our internal audit team temporarily work directly for the external auditors. This means that the internal audit team will do most of the field work with the documentation being reviewed by the external auditors, and the internal auditors will be 100% supervised by the external auditors. %0A %0AI would be very surprised if you were able to find an audit firm willing to directly supervise your staff. This would require them to take on responsibility beyond their remit.%0AHowever, work done by internal audit can be relied on by your auditor and it may allow them to minimse reperformance of controls testing.
jcunningham last edited by
I agree, if you involved all employees from your internal audit department, you would see cost savings. But on the other hand, for the technology part of SOX, getting resources from your local IT department may prove an issue. That issue is their availability due to the number of projects and day to day monitoring that goes on behind the scenes.
SOX-Migration last edited by
You must be assuming that the work your Internal Audit does the rest of the year is essentially useless. Does the Audit Committe expect Internal Audit to forego their audit plan to assist external audit? If Internal Audit is not providing useful services, why have them at all? The money you save on them would make up for the extra paid to the external auditors. :roll:
Of course I mean this all sarcastically. If you want to reduce external audit fees, you’d have to reduce the time your external auditor spent on your audit. The best way to do that is to have EVERYTHING adequately documented, easily retrievable, suppported, etc. Anticipate their questions and have documentation available. Dedicate staff to retrieving information to them, but not completing the audit for them. And certainly this all ties in to SOX. If you’ve got your documentation up to snuff, the external firm should be in and out in a flash.
SOXBriefs last edited by
I agree with Cook. The auditors will be more likely to rely on your testing, and thus decrease their own testing only if you present them with a well-organized, well-documented SOX compliance effort.
One of the most important factors in that effort is the manner in which your work is communicated to your auditors. If you present them with a well-structured methodology for choosing significant accounts and determining key controls, they will be more likely to believe that your underlying testing is in as good of shape as your methodology.
This is not to say that your testing can be poor. However, do not underestimate the power of presentation with your auditors. It sets the tone for the engagement and can save countless hours of work in the long run.
ugogirl last edited by
I’ve seen several companies set up a separate SOX Team internally so the external auditors can rely on their work. This team is unrelated to the normal Internal Audit team. The SOX team maintains their independence from the Internal Audit team. The external auditor has agreed with this approach. The SOX team will have a financial lead and an IT lead. These are key roles and probably need to be employees of the company because they will guide the effort and ensure deliverables from testing are adequate. The rest of the team may have less experience or could be contractors for the testing phase. This saves money and the external auditors can rely on the testing work completed. for other phases, then the skill set and experience will be different so that talent will cost more.
IrquiM last edited by
I am part of a team like that mentionend by ugogirl
And - there is also another way of saving money… get a fixed price from the auditors… and challenge their way of calculating it.
It was done at my company, and the price for this year (without any testing) went from about USD 1.5m to almost half.