These meetings can be viewed as the rim on the wheel discussed in the preceding
paragraph. Personal acquaintance can go a long way to removing the barriers to ef-
fective communication.
(iv) Frequency. As with the nature of communications, the frequency of some com-
munications between a company and its auditors is required by professional stan-
dards or statutory regulation and the frequency of such communications (e.g., audit
committee meetings) follows naturally from the audit process. With respect to other
communications, the expectation is normally to avoid surprises. This means early
communication of any matters that could present a significant problem for the com-
pany or jeopardize the timeliness or success of completion of the services being pro-
vided. The watchword for both the company and auditors should be “when in doubt,
communicate.” While the volume of communications encountered through the in-
basket (either paper or electric) and phone mail can be daunting, that will never be a
satisfactory explanation in hindsight for the failure to communicate an important
matter on a timely basis.
(c) Consistency of Service. With few exceptions, companies seek a consistently
high level of service from their auditors, both over time and at all locations around
the world where the companies are being served. However, it is useful to recognize
the factors that can impact achieving a consistent high level of service.
First and foremost is a commitment on the part of both the company and the au-
ditors to a consistent high level of service. The most able audit organization in the
world will have difficulty overcoming a severe lack of cooperation from an interna-
tional company. Responsiveness to the needs of the auditors, whether they be for ac-
cess to key individuals, information, or answers to questions raised is crucial to the
auditor’s success in consistently delivering high quality services.
Another factor that must be considered in establishing an expectation for a consis-
tent level of service worldwide is the availability of top quality people in some parts
of the world. For a variety of reasons, international companies may have significant
operations in areas of the world where the supply of well-trained financial personnel
is extremely limited. This can impact both the company and the auditors in those lo-
cations. Traditionally, both parties have sought to address this situation by sending in-
dividuals from areas where there is an ample supply of financial expertise to those lo-
cations where there is not. While this may meet the immediate need, the approach is
also not without its drawbacks. Specifically, it is difficult to assimilate the national cul-
ture and business environment in these locations quickly. It may not by possible for
the expatriates to gain acceptance into the business community with the insights and
understandings that such acceptance brings, except over a fairly long period of time.
Both with respect to consistency over time and consistency from location to loca-
tion, a critical element is feedback from the company to the auditors on their per-
formance. Simply put, the auditors need to know, for better or for worse, how they’re
doing. The company should commit to providing feedback on a periodic basis that is
consistent in coverage with the scope of services being provided by the auditors.
While the specific performance measures to be included in the feedback may vary
from company to company, they typically would include subjects such as:
- Sensitivity to the company’s needs
- Business perspective
31 • 10 MANAGING THE AUDIT RELATIONSHIP IN AN INTERNATIONAL CONTEXT