The complexity and scrutiny associated with the audit function have risen exponentially compared to just a few years ago in the USA. The choice of whether or not to hire an audit manager for the CPA firms has gone from a luxury to an absolute necessity for firms who want to manage their way through all of the changes while not overworking their current employees.
If you wait, chances are you will experience the effects of bottlenecks during peak seasons, missed deadlines, or even worse, attrition among your key employees due to burnout. In this blog post, we will discuss the importance of having audit leadership, what to look for in an audit manager candidate, and how to recruit the right one for your firm.
Why CPA Firms Need Strong Audit Leadership Today
The audit process is the heart and soul of the reputation of any business organization, and the slightest mistake in the process of auditing can make an impact on its credibility. Therefore, as the audits become increasingly complicated, the role of a person able to manage the whole process becomes vital.
Growing Complexity of Audit Engagements
Auditing standards have evolved, and it is necessary to remain aware of changing requirements from regulatory bodies such as the PCAOB and AICPA. A manager who keeps up-to-date with changes in auditing standards will be able to assist in maintaining proper auditing methodology.
Modern audits require handling of large amounts of data, integration of systems, and auditing of multiple entities of the firm with various ownership structure layers. Without having a manager to coordinate the process, important details can be overlooked.
Rising Client Expectations for Audit Quality
The clients’ increasing demands include a faster time frame as well as insightful audit results, rather than just signing the report at the year-end. An efficient audit manager will be able to provide a good solution to this issue through providing continuous effective communication.
Organizations, which do not provide such service, run the risk of losing clients to their more efficient competitors. This is one of the most important reasons why the firms opt to hire an audit manager instead of delegating the responsibility to the busy senior staff members.
Internal Staff Bandwidth and Workload Management
In the absence of a manager who will organize the schedules and allocation of tasks, there may be an uneven distribution of workload among the staff where some end up being overloaded while others simply await instructions. Such unevenness results in stress, high rates of turnover, and a lack of uniformity of the audit output quality.
The presence of a manager brings some sort of order where the work is assigned depending on the experience of the staff, and the schedule of the audit engagement is monitored.
What to Look for When You Hire Expert Audit Managers USA
However, not every experienced accountant is able to become a good leader in an audit team. Firms that are looking for experts in audit managers for the whole of the USA should base their assessment of the candidates on a number of criteria.
Technical Qualifications and Certifications
CPA certification becomes a must have requirement along with a certain level of practical experience using GAAS in various engagements. Other certifications like Certified Internal Auditor can also become advantageous in creating a strong foundation in technical skills.
Besides certifications, the firm needs to consider the candidate’s knowledge of audit software that can be found widely within the auditing industry, because technical skills impact the efficiency of the engagement process. Those candidates that can share their experience with the use of those software become the best candidates for the job.
Industry-Specific Audit Experience
The audit needs are very diverse depending on different industries including non-profit organizations, construction firms, and financial services firms. The individual who has been exposed to the industry in question will be able to pick up on industry-specific risk issues much faster compared to an individual with general audit training.
For those firms that specialize in a certain industry where all their clients come from, it is important that they consider individuals who have experience in the industry.
Leadership and Team Management Skills
Being technically skilled is not sufficient to ensure success in this position, since audit managers must also be able to train employees, evaluate work papers, and communicate with clients under time pressure. Candidates who show themselves to be capable leaders have a proven history of training young employees and handling disputes in a constructive way.
In an interview process, firms should ask the candidate for examples of dealing with a tough situation related to employees or conflict with a client over audit results.
How to Hire an Audit Manager for CPA Firm: A Step-by-Step Approach
When an organization commits itself to taking the initiative, a systematic approach to recruitment ensures that they get the right person on board. Those organizations that do not give enough weight to the selection process are bound to redo the entire process within a year.
Defining the Role and Scope of Responsibilities
When putting out a job description, it is necessary for firms to lay out clearly the duties that the position of an audit manager will entail, such as which kinds of engagements will be handled and how client facing they will be. An ambiguous description generally ends up attracting individuals who do not suit the job.
Additionally, it is important to establish whether the audit manager will report to a partner or if there will be another tier between the two positions. This will eliminate any misunderstandings when the individual joins the firm.
Sourcing Candidates: In-House, Outsourced, or Offshore
There are various routes firms can adopt if they are thinking to hire an audit manager, which include internal promotion, domestic recruitment or partnering with an outsourcing firm specializing in recruiting experienced accountants. Different options come with their own time frames and costs.
Offshore and outsourced employment has become increasingly popular owing to the fact that it allows firms to access experienced audit managers without having to spend much time on domestic recruitment of the same. Firms adopting this approach need to adopt the same rigorous selection criteria as if they were looking at a domestic recruit.
Structuring the Interview and Evaluation Process
For this position, the interview process should include a technical test, an examination of sample audit projects conducted in the past, and an interview that addresses leadership situations only. Not completing any of the above-mentioned steps raises the probability of hiring a wrong person.
Including current employees who conduct audit processes in the interview process could be beneficial in gaining understanding about how a new hire will fit in the existing workforce. firms which take input from many sources generally make better decisions.
Benefits of Hiring Professional Audit Managers for Long-Term Firm Growth
The benefit of this position is not limited to just one auditing period. firms that hire professional audit managers will be able to achieve more stable growth, better client relationships, and increased auditing consistency.
Improved Audit Quality and Compliance
The dedicated manager will ensure that there is no oversight risk because he/she will do a detailed review of the workpapers and make sure that the team doing the engagement adheres to the firm’s methodology.
The reputation of the firm is important, especially considering that the quality of the audit documentation is receiving increased attention from the licensing body and regulatory agencies.
Scalability During Peak Audit Seasons
A seasoned manager would be able to allocate the workload effectively among all team members, which means that the firm could handle extra clients without adding more pressure on its existing workforce. This feature will become particularly important as firms expand their client list every year.
It is common practice for firms to hire professional audit managers that have good planning skills to handle the overlapping deadlines better than firms that just employ partner-based supervision.
Stronger Client Retention and Trust
Consistency is one thing that clients like, and if the audit manager is consistent in communicating with the clients, he is able to foster trust which helps in the retention of clients. Such relationship management is not an easy thing for partners to do in each and every client relationship.
The consistency helps open up the advisory dialogue because clients will have more confidence in their audit teams to talk about other issues.
It is no longer possible to conduct an audit without effective leadership because the audit is becoming increasingly sophisticated and increasingly client-focused. The decision to hire an audit manager for CPA firms is the best way to ensure that the firm will be able to continue operating at high levels and meet the increasing demands of clients without stretching its partners.
Regardless of whether a firm opts to make an internal appointment or recruit an external candidate for the position of an audit manager, it should be done in a well-organized manner. Those CPA firms that take the time to properly identify the role of an audit manager and thoroughly examine candidates have much higher chances of making a good decision.
Team up with The Fino Partners, an outsourcing partner that is well-known for assisting CPA firms in finding highly qualified and experienced auditors who fit well within the team. If you need someone at any level from leadership to full audit staff, The Fino Partners will help you find them without having to go through lengthy recruiting processes.
