Tuesday, September 21, 2010

When Auditors Don't Agree

There are many times when auditors do not agree with one another on the significance of an audit finding, questionable cost, or internal control weakness. Disagreements among peers can usually be worked out amicably but disagreements between auditors and supervisors and/or managers can become quite delicate to resolve. "Independence" and the exercise of "auditor judgment" are two key bywords/phrases in the auditor lexicon. Questioning an auditor'sjudgment or calling into question his/her independence is crossing a very critical line. There are legitimate reasons why a supervisor might disagree with the audit conclusions and recommendations of a subordinate. There are less defensible reasons as well.

Before an audit report is issued, every effort is made to reconcile differences in opinion. If the difference of opinion cannot be reconciled and the auditor's position is changed, the respective positions are still retained as part of the official file. At this point, an auditor can choose to remove his association with the audit. Contractors may be able to tell when there has been a disagreement between auditor and management by looking at the audit report to see if the auditor's name is listed as a point of contact. If it is not listed, there might have been dissension in the clubhouse.

No comments:

Post a Comment