Audit overrun billings can be frustrating—and expensive. But can they be avoided?

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Can growing companies avoid audit overrun billings?

In most circumstances, it is inevitable that companies will be subjected to external audit as they grow. If the finance team members do not have experience working in auditing firms before, understanding and managing audit requirements can come as an additional challenge for the first few instances, with the hope that things improve in the coming years.

At the end of the day, from the business perspective, we all want to stick to the agreed upfront audit fee. Now, if the actual cost of audit deviates from this agreed number as a result of receiving audit overrun billing, all else being equal, it's giving a very strong indication that there is definitely room for improvement.

Going back to the question I raised earlier—can audit overrun billings be avoided? The answer depends on what the root causes driving these billings are. Have you missed informing your auditors of a significant business development during the planning stage? Or have you committed to your auditors something that was later not delivered in a timely manner?

Need a hand managing audit overrun billings? Contact VMC.

VMC's views are general insights—not one-size-fits-all advice. Every company's situation is unique.