“Auditing Your Auditor” is the cover story of the April 2010 issue of CFO, highlighting examples of fee negotiations and audit fee benchmarking opportunities for CFOs. Pressured to reduce costs CFOs are examining all budget items, including audit fees. However, CFOs should not be seeking the lowball fee for fear of being underaudited.
What are the marketing implications from “Auditing Your Auditor?”
Client loyalty isn’t what it used to be. As sited in the CFO article OSG switched to PwC in 2009 after 40 years with Ernst & Young, and its $2 million audit fee dropped by a third. Ensure client satisfaction with a formal client satisfaction program, which the majority of CPA firms are not doing.
Help your clients to operate more efficiently. This will enable you to offer a more competitive fee since you will be doing less work.
Be sure that your clients receive attention from partners and managers. Make your clients feel important. Be proactive with information and advice.
Provide your team with adequate training in order to run the audit at optimum efficiency, and reduce risk.
Consider negotiating additional services within the audit fee. The client will feel like they are getting more bang for their buck.
Analyze your firm’s new and lost clients, lost proposals, and the current client fee negotiations from the past two years. Who were the prior auditors of your new clients? Which firms did your lost clients and prospects select? What impact has fee negotiations had on your firm’s revenue? This information will enable you to price future engagements more competitively.
The editorial team of CFO provides CFOs a way to benchmark audit fees against what their peers paid, over a three-year period. For more information go to www.cfo.com/fees.