Why would an auditor withdraw from an engagement?

(a) consider the professional and legal responsibilities applicable in the circumstances, including whether there is a requirement for the auditor to report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities;
(b) consider the possibility of withdrawing from the engagement; and
(c) if the auditor withdraws:
(i) discuss with the appropriate level of management and those charged with governance, the auditor’s withdrawal from the engagement and the reasons for the withdrawal; and
(ii) consider whether there is a professional or legal requirement to report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities, the auditor’s withdrawal from the engagement and the reasons for the withdrawal.
 

The auditor may encounter exceptional circumstances that bring into question the auditor’s ability to continue performing the audit, for example, in circumstances where:
(a) the entity does not take the remedial action regarding fraud that the auditor considers necessary in the circumstances, even when the fraud is not material to the financial statements;
(b) the auditor’s consideration of the risk of material misstatement resulting from fraud and the results of audit tests indicate a significant risk of material and pervasive fraud; or
(c) the auditor has significant concern about the competence or integrity of management or those charged with governance.
 

 Because of the variety of the circumstances that may arise, it is not possible to describe definitively when withdrawal from an engagement is appropriate. Factors that affect the auditor’s conclusion include the implications of the involvement of a member of management or of those charged with governance (which may affect the reliability of management representations) and the effects on the auditor of continuing association with the entity.
 

The auditor has professional and legal responsibilities in such circumstances and these responsibilities may vary in different circumstances. For example, the auditor may be entitled to, or required to, make a statement or report to the person or persons who made the audit appointment or, in some cases, to regulatory authorities. Given the exceptional nature of the circumstances and the need to consider the legal requirements, the auditor considers seeking legal advice when deciding whether to withdraw from an engagement and in determining an appropriate course of action.

When you choose an audit firm to start the audit process, you’re choosing a partner. You want an auditor who is highly experienced, can communicate well, and knows how to support your organization on its compliance journey. Once you find an audit firm that meets your expectations, your organization will need to continue building a good relationship with your auditor throughout the audit process. It doesn’t stop at signing a contract, and it’s a two-way street. What actions or behaviors could negatively impact your relationship with your auditor? When does an auditor have the right to withdraw from an audit?

Finding the Right Auditor

What should you be looking for in an auditor? How do you know you’ve picked an audit firm that will support and educate you during the audit process? How you can you make sure you’re not giving an auditor the opportunity to withdraw from an audit? Although audits are difficult, you don’t have to tackle compliance requirements alone. Finding the right auditor for your organization starts with an evaluation of your organization’s timeline expectations, communication goals, and auditing needs. Once you know where you stand, you are able to find an auditor that can support you.

The quality of work you receive when you’re handed a compliance report is directly related to the availability, qualifications, and skill of the Information Security Specialist you work with. At KirkpatrickPrice, our audit team is made up of qualified, experienced auditors. You don’t want to choose a firm that sends a junior-level auditor to check your internal controls, test your physical security, and walk through your processes. You deserve to have a senior-level auditor working alongside you during the audit process. These experienced auditors focus on the goal of independence and support so that there isn’t pressure to withdraw from an audit.

Building a Relationship with your Auditor

Once you choose an audit firm, what is your organization doing to foster a positive partnership with your auditor? Even after an audit process is completed, a healthy relationship with an auditor means continued support and education in your compliance efforts. To make sure you have built a strong relationship with your auditor, you can review our Six Signs that You’re in a Good Relationship with Your Auditing Firm. Following these signs of a good auditor will help point you in the direction of meeting your long-term compliance goals and avoid the possibility of an auditor needing to withdraw from an audit.

The key to maintaining a good relationship with your auditor is recognizing the audit firm’s requirement for independence. Auditors can withdraw from an audit if the rules of independence are broken during the audit process. If an auditor feels as though something has happened to where they cannot be objective, they have the right to withdraw from the audit. To make sure your organization doesn’t cross those boundaries, you can focus on respecting the auditor’s independence throughout the audit process. You can trust that your audit is in good hands when you choose an auditor with the integrity to remain independent.

Fostering a good relationship with your auditor puts you on the right path towards compliance and encourages a support system for your audit process. Start your journey with an independent audit firm that meets your needs and avoid any problems that might require an Information Security Specialist to withdraw from an audit. Contact KirkpatrickPrice, today.

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