statutory auditor, Audit Partner at RSM Poland
Growing competition and a still strong pressure on prices - How do auditors cope in such a difficult market environment? How do they acquire new customers? How is the specificity of the auditor's work changing? Are there new challenges arising?
Over the last 7-10 years an increased pressure on prices has been indeed noticeable. In my opinion, the management boards of audited companies do not fully realize that price pressure leads to decline in the quality of auditors' work and that a cheaper audit does not bring added value. As a result, the owners receive nothing more than a few pages of opinions and a report. Our company is increasingly engaged in reviewing audits previously conducted by other certified auditors, which allows us to evaluate the work and the procedures of other audit firms. I am sorry to say that we are observing deterioration in the audit quality as compared with the situation a few years ago - not to mention what will happen after the introduction of the obligation to apply international audit standards.
So to answer the question, auditors perform fewer procedures because, by reducing the time to audit the reports, they do not document properly. At the same time, they sign their opinions after allegedly conducting the audit according to either national or international auditing standards. Many times I have witnessed auditors who, probably for fear of losing a customer, issued an unqualified opinion despite the fact that - according to me - they should have delivered a negative opinion or, due to failure to remain independent from the customer, they should not have conducted the audit. Auditors try to survive on the market at the expense of the quality and reliability of their work or, what is worse, without regards to ethics. Thus, new challenges are arising for both the National Chamber of Statutory Auditors (KIBR) and the Audit Oversight Commission (KNA), which should deepen the analysis and control over audits. The liability of auditors for executed tasks should be increased just as the liability of the management boards signing audit contracts with certified auditors. It often happens that a resolution of the shareholders/supervisory board on the selection of an auditor is a mere formality, done at the request of the company's management.