cations tools have become commonplace for virtually all organizations. They have
contributed to vastly improved communications as compared to years ago. The abil-
ity to send electronic documents, analyses, and files between the company and their
auditors and between the auditors serving the parent company and those serving the
subsidiaries and vice versa should be expected. The ability to communicate in this
fashion enhances both the timeliness of communication as well as the efficiency of
the audit process.
While video conferencing has not been used extensively to date in communica-
tions between companies and their auditors at various locations around the world, the
audit organization’s views and expectations on that communications form should be
assessed. In light of the expense and time involved in extensive global travel and in
view of the effectiveness of video conferencing, particularly for people who have
worked together on a face-to-face basis in the past, video conferencing capability
should be carefully considered by international companies in working with their au-
ditors in the future.
(v) Working with Internal Auditors. For international companies who have the ex-
pectation that their external auditors will rely on the work of internal auditors to more
than insignificant extent, it is important to assess the external audit firms’ approach
to relying on internal audit and their track record in that regard. This assessment
should be specific to the particular engagement team proposed at the parent company
level. Further, if the company has internal audit activity both in the parent country
and in other countries around the world, the external auditor’s record should be eval-
uated with respect to working with internal audit in a comparable manner.
Companies may also wish to consider whether the external auditors are familiar
with the professional standards promulgated by internal audit professional organiza-
tions and whether the external auditor could evaluate and make recommendations for
the quality of internal audit practice in the company.
(vi) Continuity. Knowledge of the company, its industries and businesses on the part
of the service providers is a key ingredient. Rarely can such knowledge be gained in
the course of a single year’s audit engagement. In fact, experience indicates at least
two years’ experience is normally necessary for the partners serving a company to be
in a position to provide the greatest value to the company. Professional standards in
some countries limit the period of time that professionals can serve a specific com-
pany, generally five to seven years for partners, (see new U.S. requirements in sec-
tion 31.2), and other periods for managers or other professional staff. Within these
limitations, it generally behooves a company to keep the engagement partners for as
long as possible and to obtain a “fresh look” periodically through the rotation of other
professionals assigned to the engagement team.
Again, companies should seek verification of an audit firm’s track record in pro-
viding continuous service at the partner and manager level from existing clients, par-
ticularly international companies in similar situations.
(vii) Responsiveness and Quality of Advice and Recommendations. Over time, the
evaluation of the success of a relationship with an audit firm will often come down
to judgment about the responsiveness and quality of the advice and recommendations
received from the auditors. There are several factors which are considered in making
those judgments:
31.3 ASSESSING THE QUALIFICATIONS OF THE CANDIDATES 31 • 13