An accounts receivable audit program is an intense third-party review of this portion of a company’s accounting system. Many different types of individual activities make up an audit, such as checking the accuracy of outstanding balances, reviewing the history of bad debts, and recomputing previous work by the company’s staff. Choosing the best accounts receivable audit program can be a tedious task. A company needs to look at the reputation of the accounting firm conducting the audit, skills and abilities of auditors, and the specific types of activities the firm will conduct for a given price. Not all audit programs are the same, driving the need for this review.
In most audits, the accounts receivable audit program is best conducted by a third party, namely a licensed accounting firm. This firm has the individuals, background, knowledge, and other abilities to properly conduct an audit. One thing to consider, however, is the reputation of the accounting firm and its overall standing in the public accounting industry. Companies need to consult with partners of each accounting firm in order to discover how the firm would best work with the company. Speaking with other clients of the accounting firm may be able to help reveal its reputation.
Along with the accounting firm’s overall reputation, a company needs to look at the personal knowledge, skills, and abilities of each auditor who may work on the accounts receivable audit program. In this case, cheaper audit costs are not always best. Many accounting firms use their cheapest — and often least knowledgeable — auditors for conducting a specific program. While these workers are certainly supervised, it may not result in the best audit for the company. Therefore, a review of each available auditor who may work on the accounts receivable audit program can help a company determine its potential strength.
Finally, choosing the best accounts receivable audit program may also come down to reviewing the actual tasks. Again, audits vary in length and type, especially depending on the money a company is willing to pay for the audit. While it is up to the accounting firm and auditors working the program to create the audit process, the company should also have a say in it. Additionally, a company may need to compare one accounting firm’s accounts receivable audit program to another accounting firm’s program. This ensures a company is getting an audit that best suits the company and its accounting system.