Auditor Correspondence

What is Auditor Correspondence?

Auditor correspondence refers to all financial documents evidencing communication (written or electronic) between your company and financial auditors. It includes any means of communication via letters, notices, reports and filings, related to the assessment of your company’s financial position.

It covers:

• Financial Audit Reports: Correspondence related to the audit of your company’s financial reports
• Management Letters: Correspondence related to accounting and management issues in your company, highlighted by the auditors
• Working Reports: Correspondence related to the resolution of the issues and recommendations to solve your company’s existing accounting and management issues

Why is Auditor Correspondence important for business today?

Having a comprehensive set of auditor correspondence enables your company to:

• Gain visibility into the regulatory requirements of past audits
• Mitigate the legal, operational and financial risks related to any regulatory non-compliance
• Evaluate the time required to conduct audits and financial reporting
• Assess fees and other expenses related to preparation of your company’s financial audit
• Evaluate the issues identified by auditors and formulate internal processes to resolve them

Why is it important for an event tomorrow?

Having a comprehensive set of auditor correspondence is important for an event tomorrow, as it helps potential investors to:

• Assess the frequency and type of issues identified by auditors related to your company and their impact on your business
• Evaluate various regulations and audits that your company has to comply with across jurisdictions
• Validate your company’s financial condition as financial reports are authenticated by auditors
• Accelerate decision-making process as the data related to your company’s financials are easily accessible
• Evaluate your internal auditors’ capability to review financials, handle internal issues and comply with regulations

Pros of addressing Auditor Correspondence

• Helps new staff to learn from past accounting and management issues and resolutions mechanism used
• Helps staff preparing the annual financial reports to refer to discussion materials in past audits in order to guide decisions
• Increases likelihood of compliance and best practice by keeping a reference guide to the key issues identified in past audits
• Reduction in accounting and management issues through implementation of rigorous internal processes
• Increased accuracy related to corporate financial information which helps avoid any discrepancies in reported numbers

Cons of not addressing this topic

• Increased potential for past recommendations to go unimplemented thereby increasing regulatory risk
• More difficult for the preparation of subsequent financial reports to capture the issues raised in past audits
• Increased cost and time associated with due diligence for both company management and internal investors