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Support an Auditor in Supporting You

Support an auditor in supporting you
Someone asked recently if it is reasonable for an independent auditor to request year-to-date (YTD) financial statements when putting together a bid for a financial statement audit.
Yes!
YTD financials are incredibly useful in determining scope/price. If there have been any significant changes since last year’s audited financials, they’ll see it. They’ll (hopefully) act accordingly – the fewer the changes, the lower the risk, the more reasonable the price, for example. More changes might be more areas for them to audit, more things for them to propose fixes on, they will need to price accordingly.
Don’t be afraid of a higher price, though. If an auditor is facing a tough situation and they have to continually have to write off too much time each year, they’ll fire the client and you’ll have to start over in your search, and THAT’S so much fun.
Also, if the YTD financials show a serious cash crunch, it could be problematic. Auditors aren’t allowed to be owed any money, so if they’re still owed this year’s audit fees when it’s time for next year’s audit, they won’t be able to do the work.
And if the YTD financials show a serious contraction and they think it’s not in your best interest to pay their fees but need someone who charges a lot less, they won’t waste their time or yours with a proposal.
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