What Should You Expect From Your External Auditor?

When organisations review their audit arrangements, fees are often one of the first things discussed. 

That makes sense. External audit is a compliance requirement, and every organisation needs to manage its costs responsibly. 

The other question is whether the organisation is getting what it needs from the audit relationship. 

Independent assurance comes first in every external audit. The way the engagement is planned, communicated and delivered also affects management, finance teams and the board. 

Is communication clear and timely? 

Does the auditor understand how the organisation operates? 

Can management and directors raise questions and receive practical explanations? 

Do those involved finish the process with greater confidence in the financial information before them? 

In my experience, these are the things that often determine whether an audit feels useful or simply becomes another annual obligation. 

So what should an organisation expect from its external auditor? 

The process should be clear from the start

A common frustration I hear from finance teams is not knowing what happens next. 

They may be unsure what information is required, when it is needed, who should provide it or what will happen once it has been submitted. 

A well-managed audit should reduce that uncertainty. 

Timelines should be discussed early, information requests should be organised and areas likely to need more attention should be identified before they become urgent. 

There will still be additional questions. Every audit involves investigation, professional judgement and issues that only become clear once the work is under way. Even so, the engagement should feel structured and reasonably predictable rather than unnecessarily reactive. 

When organisations understand what to expect, they can plan their resources more effectively. This can ease pressure on finance teams and help the audit proceed more efficiently for everyone involved. 

Boards need clarity as well as assurance

Most directors are not looking for longer audit reports. They want confidence that the information they rely on is sound, significant risks have been considered and important matters have been explained clearly. 

A good audit discussion helps the board understand where its attention may be needed. 

Board and Audit and Risk Committee conversations might reasonably cover questions such as: 

• What changed during the year? 

• Which matters required the greatest judgement? 

• Are there areas that warrant ongoing attention? 

• Have any emerging risks been identified? 

• Is there anything management should address before the next audit cycle? 

Technical knowledge is essential, but being able to explain technical matters clearly is important too. 

The most useful audit conversations give directors enough context to understand the matters before them and ask informed questions. 

A good audit can prompt useful questions

The audit opinion is the formal outcome of an external audit, but some of the most useful conversations happen during the engagement. 

Experienced auditors see a wide range of organisations, systems and reporting practices. That perspective can help them recognise patterns, ask informed questions and identify areas that may need a closer look. 

This may lead to discussions about: 

• Financial reporting processes 

• Internal controls 

• Documentation practices 

• Governance arrangements 

• Risk management approaches 

• Operational processes connected with financial reporting 

These conversations should not be about criticism or finding fault for its own sake. They give the organisation a chance to look at existing practices with a fresh set of eyes.

Sometimes that confirms a process is working as intended. At other times, it may identify a practical improvement that had not previously been considered. 

For many organisations, these discussions are an important part of the value they receive from the audit process. 

Independence does not mean being distant

There can be a perception that an auditor needs to remain distant in order to remain independent. I do not believe the two are the same. 

Independence is fundamental to external audit and must be protected. It is what gives the assurance its value. 

But it does not prevent clear communication, timely responses or a constructive professional relationship. 

An auditor can be accessible and straightforward to deal with while remaining objective. Management should be able to raise issues early, boards should feel comfortable asking questions and the auditor should be clear about the boundaries of their role. 

In my view, the best audit relationships manage that balance well.

The approach should suit your organisation

Every organisation operates differently. Industries carry different risks, funding models create different reporting obligations and governance structures affect how decisions are made and overseen. 

An approach that works well for one organisation may not suit another. 

That is why the auditor needs to understand: 

• How the organisation operates 

• What matters most to its stakeholders 

• Which areas involve greater risk or judgement 

• The pressures facing management and the board 

• The environment in which the organisation is operating 

This knowledge helps the auditor focus on the matters that are most relevant, rather than treating the audit as a standard checklist exercise. 

It also makes the conversations more useful because they reflect how the organisation actually operates. 

So what should you expect?

External audit provides independent assurance over financial reporting. That will always be its primary purpose. 

Organisations can also expect the relationship around that assurance to be professional, organised and constructive. 

That includes:

• Clear and timely communication 

• Early planning 

• Well-organised information requests 

• Practical discussions when issues arise 

• Access to experienced people when needed 

• Professional independence and objectivity 

• A genuine effort to understand the organisation 

These qualities do not replace technical capability. They support it and help the organisation get more from the time and effort invested in the audit. 

Before your next audit

Most organisations spend a considerable amount of time preparing for their annual audit. Before the next one begins, it is worth asking whether the current approach is giving the organisation the assurance, communication and confidence it needs. 

If it is, that is something to build on. If there are areas that could work better, an open conversation with the auditor is a sensible first step. 

A good audit relationship should help boards and management understand what is happening, know which matters need attention and use everyone’s time well. 

That is a fair expectation of an external auditor. 

How Bentleys can help

At Bentleys, our Audit and Assurance team works with organisations across a range of sectors and reporting environments. We take the time to understand how each organisation operates, plan the engagement clearly and keep communication open throughout the process.

Our aim is to deliver the independent assurance required while making the audit practical, organised and relevant for management, finance teams, boards and committees. 

If you are preparing for an upcoming audit, reviewing your current arrangements or considering an audit tender, talk to the Bentleys Audit Team about how we can support your organisation’s reporting, governance and compliance requirements.