The Center for Audit Quality and several corporate governance organizations and companies have created a new online auditor evaluation tool to help the audit committees on corporate boards evaluate their auditing firms.
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The new tool comes in the form of a PDF file containing a questionnaire. It is intended to assist audit committees in performing an annual evaluation of the external auditor in order to make an informed recommendation to the board whether to retain the auditor. The tool contains sample questions to gauge the quality of services and the sufficiency of resources provided by the auditor, communication and interaction with the auditor, and the auditor’s independence, objectivity and professional skepticism. It also provides a sample form for obtaining input from company personnel.
Along with the CAQ, the groups behind the effort include the Association of Audit Committee Members Inc., Corporate Board Member, the Independent Directors Council, the Mutual Fund Directors Forum, the National Association of Corporate Directors, and Tapestry Networks.
The assessment tool is the first outcome of an ongoing collaboration that the participating organizations plan. They hope to leverage their own efforts to expand access to useful tools and materials with the objective of strengthening audit committee performance and transparency.
“The new tool provides a concise, scalable approach that encourages audit committees to evaluate the auditor’s performance as part of making a recommendation to the board whether to retain the auditor in the coming year,” said CAQ executive director Cindy Fornelli.
The tool can be accessed at www.TheCAQ.org/resources/pdfs/AuditorAssessment.pdf.