The Top 3 Dilemmas With Your Auditors

After two decades working across finance, audit and business advisory — including time as an auditor myself — I still see the same handful of misunderstandings come up between businesses and their auditors. None of them are really about the numbers. They're about what an audit is actually for.

1. Can we rely on our own auditor's work?

An auditor's independence is the whole point of an audit — but it cuts both ways. The financial statements are always management's responsibility, not the auditor's. The auditor's job is to form an independent opinion on them, not to prepare them or vouch for decisions the business made. Confusing the two is where the first dilemma usually starts.

2. Can our auditor force us to book something we don't want?

No — but they can, and should, propose adjustments where the evidence supports them, and disagreeing has consequences. Take a business acting as an agent rather than a principal in a transaction: booking the full transaction value as revenue instead of just the commission overstates income, and a competent auditor will raise it. From there, there are broadly three outcomes: the business agrees and corrects the entry; the business explains its reasoning and the auditor accepts it; or the two sides don't agree, and the auditor qualifies the opinion rather than signing off on a treatment they don't believe is right.

Paying the audit fee buys an independent opinion — not the opinion you'd prefer to hear.

3. Do we need to use the same auditor as our parent company?

Not unless group policy requires it. There's a genuine trade-off here: a Big 4 firm brings scale and international reach, but a local firm often brings closer attention and a better understanding of your specific market. Where group audit materiality and consolidation matter, coordination between auditors is what counts — not necessarily using the same one.

The bonus dilemma

"We pay the audit fee, so the auditor should give us the opinion we want." This is the one that causes the most damage when it's acted on. An audit opinion that isn't independent isn't worth having — for the business, for its lenders, or for anyone else relying on the accounts.