Auditing services for the growing private company
ARTICLE | July 21, 2022
Authored by RSM US LLP
As a growing company, you may be contemplating expansion into new geographical areas, exploring new avenues of financing, considering acquisitions, or entering new markets or service areas. Having an auditor with the requisite geographical reach, as well as the business and industry experience and insights to support your financial reporting needs, is essential.
Here are some considerations when selecting an audit firm for your growing company.
1. An auditor that can service you through your growth
You may be focused on the challenges and opportunities you face today, but do you know what is coming as your business expands and grows? Perhaps you are on the verge of making acquisitions, expanding internationally, or entering new markets . As your business grows, matures and becomes more complex, an audit firm that can support your progression will provide insights about the necessary financial reporting and related challenges.
RSM professionals have years of experience working with growing companies and are familiar with the many challenges that are encountered. Consider, for example, a growing company in the life sciences industry that might be entering into collaboration agreements—a common development for a growing biotech company. One of the challenges in accounting for collaboration agreements is determining whether they give rise to revenue. The proper accounting for such agreements could significantly affect the timing and amount of revenue recognized in a particular period.
Another challenge involves the necessary financial reporting when, for example, an industrial products entity sells equipment or machinery while also selling the services to install that equipment or machinery on-site. To decide whether the revenue recognition from the sale of the equipment is distinct from the revenue related to its installation, management must first identify performance obligations in such a contract. We are able to provide the requisite guidance to help you carefully consider the relevant facts and circumstances in making the appropriate financial reporting determinations.
2. Strong industry expertise
While many aspects of financial reporting are consistent from industry to industry, there are industry-specific nuances too. Auditors who are steeped in a particular industry can help you navigate the intricacies of industry-specific accounting issues, the latest developments and best practices. Additionally, auditors with extensive experience in your industry understand relevant benchmarks and can point out areas of focus for your business.
RSM cultivates strong industry experience among its auditors through dedicated industry focus, as well as formal and informal internal education programs. We also stay current on the latest regulatory changes and industry trends. This enables RSM to anticipate relevant specific requirements common to your industry—today and in the future.
3. A commitment to ongoing innovation
As businesses increasingly deploy advanced technology to make their processes less time-consuming and more efficient, they should look for an auditor that is doing the same by also investing in its own technology to optimize the audit process.
RSM’s approach to innovation and technology focuses on three pillars, which we use to increase efficiency, minimize disruption and uncover new information. These pillars are:
Digital audit experience
RSM’s ever-evolving technology ecosystem is structured to ensure your audit engagement features tools that streamline communications, maximize efficiencies and provide valuable business insights. Our secure, cloud-based collaboration platform allows clients and engagement teams to organize and track all document requests and status updates. A real-time dashboard provides full transparency and accountability throughout the process.
We incorporate technologies, such as robotic process automation, optical character recognition, artificial intelligence and machine learning, into our audits. These technologies allow us to analyze, summarize and extract key information in an efficient way that enhances audit quality.
We use advanced data analytics to efficiently analyze exponentially larger volumes of data and deliver a more thoughtful, data-driven audit. These procedures focus on risk and therefore help us concentrate our testing on the items with the highest risk.
While digital innovation is crucial in today’s business environment, leaning too heavily on technology may not provide the appropriate level of personal attention or the necessary technical insights. Instead, we believe in human insights powered by technology.
4. A strong relationship
While you want to work with an auditor that has the technical know-how to handle your business’s growing complexity, it is also important that you receive individualized service. Personalized attention by someone with experience in your industry also is important. An auditor who works hard to understand your business can identify potential opportunities and find ways to mitigate risk.
RSM’s industry-focused practices benefit our clients because our auditors can confer with industry specialists within our organization to bring you even greater insights. These industry professionals provide an important sounding board as you explore opportunities and make decisions about your next steps.
As your company progresses in its growth journey, it is crucial to have an audit firm that can provide relevant insights along the way. An auditor that values a deep understanding of your industry and business can provide individualized insights about your business. Further, an audit firm with a national or global footprint can help you anticipate your next moves, identify opportunities, and mitigate risks. The good news? With RSM you do not have to choose. We bring the best of both worlds to you by delivering human insights powered by technology coupled with the largest national and global footprint focused on your market.
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This article was written by RSM US LLP and originally appeared on Jul 21, 2022.
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