Audit practices, like many other businesses, thrive on forging robust relationships with clients. A recent review of client relationships identified the following key challenges:
- Undefined mutual expectations
- Vague communication protocols
- Unrecognised changes in work scope
- Services falling short of client expectations
- Misaligned fees for services rendered
- Perception of commoditised service
- Delayed issue resolution
The foundation of strong client relationships lies in clear expectations, exceptional work quality, and consistent communication. Most professional firms would say that they deliver good service. Yet, the question remains: why do some external audit firms fail to consistently deliver top-tier service to their clients? The culprit often lies in over-prioritising task completion, sidelining the essential task of proactive relationship management.
Here are seven key strategies to enhance client relationships for audit firms:
Clarify Expectations Early On
The purpose of engagement is to set expectations up front. However, many professional service firms regard the engagement letter simply as a legal contract rather than a service agreement that outlines ‘how we will work together.’
An engagement document which is more than just a contract is essential to really communicate to clients the servicing requirements of the audit. The service agreement should outline in detail:
- The audit’s extent and value
- Timeline and method of task execution
- Communication dynamics between parties
- Responsibilities and expectations on both sides
- Process for handling additional, out-of-scope tasks
- Mutual expectations in relation to process and outcomes
Action: Always set up a client induction meeting to facilitate a comprehensive understanding and mutual agreement on details of the audit engagement beyond what is just written in the document.
Master the Art of Active Listening
Part of effective communication is eliminating the barriers which lead to effective listening. Don’t plan a call or meeting when you know you’ve got limited time and may have to leave early.
If you are plagued by distractions, be it personal or professional, it will show through to your client. Try to solve those ahead of any client interactions so you can give them your full attention. Respect their time.
Yes, you have questions you need answers to, however don’t be in a rush to move on to the next question. Be present in the moment and you will find you’ll probably get more out of your client than you were expecting. Open ended questions always deliver better outcomes however they are often overlooked in the rush to complete the task.
Action: Equip your team with practical tools and techniques to enhance their listening and communication skills, ensuring that they can effectively connect with clients and gather necessary information.
Deep Dive into Their Business
You will develop mutual respect if you can show a good understanding of your client’s business. Engaging with trends and key performance metrics relevant to the areas being audited and staying informed of the regulatory environment will give you a great contextual framework. It will show your client that you care about what you’re auditing enough to understand what the numbers and the business are really about.
As part of understanding the client, you also need to understand the internal controls. Interviewing the client and then documenting that work in a flowchart is essential. It is highly advisable to ask your client to go on a ‘tour’ of their business – this way you can match up information received with what the client actually does.
Action: Encourage your team to take time to explore the client’s business operations, industry trends, and regulatory environment to achieve a comprehensive understanding that goes beyond just the financials.
Foster a Collaborative Approach
Treat the audit process as a collaborative project with the client as your partner and colleague. Take the time to get to know what makes them tick, how they conduct themselves and what their goals are. Focusing on the human side will greatly improve the business side and make the experience pleasant for all involved.
The best way to achieve this is to set mutual expectations in relation to communication up front. Talk about what you expect from the client and what value you will deliver in return. When clients see the engagement as much more than a commoditised service, they will be more involved and supportive. This can be extremely helpful when difficult conversations are required.
Action: To commence collaboration, draft an initial list of client and auditor expectations regarding data requirements, point of contacts, timelines, and other relevant details. Outline the value the audit firm brings to the table beyond just compliance, including insights, advisory potential, and industry expertise.
Prioritise Consistent Communication:
Everyone wants to minimise last-minute surprises. Yet, few professional service firms give proactive communication sufficient attention. An efficient audit process requires regular communication to monitor expectations and to ensure the timely identification and resolution of accounting and financial reporting issues.
Because audit firms are (rightly) focused on reducing risk and making sure their work stands up to review, a calendar of key milestones enables the client to own the audit process and take control of emerging matters. Problems will still crop up, but having regular review of progress will help both sides handle such situations more efficiently
Action: Break down the entire audit process into distinct phases and key milestones, e.g., data collection, fieldwork, initial report drafting, review, finalisation, etc. Identify stages where challenges or roadblocks commonly arise, and label them as potential risk points.
Use technology to improve audit quality
To really add value, auditors should be using technology to ensure that the audit process is as efficient as possible, from data collection to analysis and reporting.
Data analytics is increasingly important in providing and effective auditors should be able to use data to provide feedback on potential improvements in business processes and performance.
Action: Choose audit software which integrates seamlessly with the client’s systems and can automate repetitive tasks like data extraction and initial analysis. Provide training to all of the audit team.
Initiate Annual Reviews
Whilst there is no specific reference to an annual review in the Audit Standard ASA 210, in practice this is an essential part of every statutory audit. Even when there’s a pre-existing agreement to maintain a fee for service over several years, regular internal review is essential to ensure that the sharing of information is strong and consistent. This also provides opportunity to
- Ask the client about the quality of service and standard of communication over the past 12 months and
- Conduct a business health check to identify and understand any issues that may affect business performance over the next 12 months.
Action: Use feedback to enhance processes, improve training, and redefine communication strategies.
Building enduring client relationships doesn’t have a shortcut. It demands time, persistence, and dedication. By understanding your client’s challenges, ambitions, and needs, and then calibrating your approach, you lay the foundation for mutual trust and engagement. There is no substitute for effective communication.
The National Audits Group prides itself on a high level of client engagement. We offer our clients uncompromising standards of delivery and expertise. We pride ourselves on our ability to establish, nurture and maintain trusted relationships and believe your success is by every measure, our success.
We are more than just auditors! Let’s get talking – call now and discuss how National Audits Group can provide cost effective solutions, to meet your operational needs and strategic objectives.
Director, National Audits Group