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FEE aims to share best practices for a high-quality process when selecting the auditor in the applicable environment. FEE is eager to participate in the debate in order to pursue the following goals:
This raises two important questions to which answers will have to be found in the selection process in accordance with the company’s specific circumstances: what is audit quality? And what is the value of an audit? Although there are currently a number of studies on audit quality, to respond to these questions, one may refer to an important project by the IAASB1 to develop a framework for audit quality. The quality of services and its value to the client and to all stakeholders, as well as the need to establish appropriate interactions amongst stakeholders that will enhance audit quality, should be the ‘leitmotiv’ when selecting the auditor.
The process can be divided into the following steps:
Principles of project management should be applied to this process, and it should be up to an auditor selection panel to be responsible for leading and overseeing the whole project.
Who is the auditor selection panel? Depending on European/national laws and regulations, the auditor selection panel may be composed of audit committee members, supervisory board members and/or shareholders. Management could also be involved where appropriate – e.g. in a consultative role or in an SME environment. The auditor selection panel should be the body accountable for such a project.
This FEE publication could be of use to:
This publication is intended to be generic: it is applicable irrespective of the regulatory environment, country, sector (either public or private) or industry. It is also applicable to companies of all sizes in all market segments – e.g. public-interest entities (PIEs) and small and medium-sized enterprises (SMEs). However, due to the diverse legal frameworks and governance structures across Europe, the reader may also need to refer to local company law and corporate governance requirements.