Why companies move
The reasons are usually the same. The fee goes up each year without much explanation. The partner you were introduced to appears at sign-off and not much before. A new team arrives every year and asks the same questions about the business. Or the company simply isn't a priority for a firm whose biggest clients are many times its size.
The large firms have also been changing which clients they keep. The Big Four audited 49 of the FTSE AIM 100 three years ago and 30 now. Ownership is changing too: nearly 20 of the UK's top 60 accountancy firms are now backed by private equity, and a number of them have grown quickly by buying smaller practices.
What to look for in a smaller firm
Ask what "partner-led" means in practice:
- Who is the partner who will sign your audit report, and will they come to the planning and close-down meetings?
- Who will you deal with day to day, and how long have they been with the firm?
- Is the fee fixed, what does it cover, and how will any change be agreed?
- Has the firm audited companies of your size and in your sector, and groups if you have one?
- Can it report under the framework you use, UK GAAP or IFRS, and to an overseas parent's timetable?
Get the answers in writing as part of the proposal. A firm that means it will have no difficulty doing that.
Want to talk it through? Tell us about the company and speak to the audit team. The budget and timetable are agreed before any work starts.
Talk to usHow the move works
The simplest time is shortly after one audit is signed, well before the next year end. The members appoint the new firm, your current auditor sends its section 519 statement, and the new firm writes to it, with your permission, before accepting. The guide to changing auditor has the full procedure and a timetable.
Questions
Will our bank or investors accept an audit from a smaller firm?
An audit by any registered auditor is a statutory audit. Some lenders and investors do keep a list of auditors they accept, so check your facility or shareholder agreement before you move, and tell the new firm about it.
Can a smaller firm audit a group, or a company with an overseas parent?
Many can. Ask whether the firm has audited groups of your size, whether it reports under the framework your parent uses (UK GAAP or IFRS), and who will speak to the parent's auditors.
Is moving disruptive?
The first year with any new auditor takes more of your team's time than later years, because the new firm has to get to know the business and check the opening figures. A good firm plans that with you before the year end, and access to the previous auditor's file reduces it.