Chatting with a business contact this morning he told me why he feels compelled to go out to tender for new auditors. Bear in mind that he is a VERY experienced FD and has been in post at this multi-million pound business for 4 years. The auditors in question are a top ten firm and have been in post for 5 years.

I share below the points my friend made:

Our current auditors said they’d staff the audit with local [north London] staff; in fact the manager and staff are based in Birmingham.

We don’t know what they’re doing half the time. They ask for random invoices and have told me lies.

They do interim work during the final visit and disrupt us at our busiest time of year.

My finance team are close to resigning due to the attitude of the audit staff.

My number 2, who has been in post for 8 years, cannot understand why the auditors are so uncommunicative and disruptive in their approach.

We agreed timetables for respective actions to avoid being charged for cost overruns. When the auditors miss their deadlines and cause delays they then report US to the audit partner if our next stage is behind the original schedule.

We know they underbid for the work originally and have been constantly trying to push the fees up each year, which we have resisted as the group structure has been simplified.  We agreed a small excess for cost-overruns last year. There won’t be any this year.

I know the auditors have to be independent but ultimately we need to work together to ensure the financial accounts are right. This firm (other than the partner) takes a more ‘them and us’ approach than any firm I’ve ever worked with before.

We’ll go out to tender again and we’ll have to let them re-tender but there’s almost no prospect of them being reappointed.

If I didn’t know better I might think that the FD has something to hide and that the auditors are just doing their job properly and objectively. And maybe that’s how some audit partners excuse themselves when they lose a re-tender – as is bound to happen here.

I understand that over the years there have been NO major audit issues or disagreements re figures or presentational adjustments. The audit partner has been objective, professional and helpful. He’s been firm when he needed to be – but this has not caused any serious disagreements or issues.

Lessons?