Request for Proposal: What to Consider When Selecting an Audit Firm

Whether it is a result of internal policy, or simply dissatisfaction with your current provider, it is inevitable that you, as a bank executive or director, will be thrust into the audit and accounting firm selection process.audit firm selection

If you are satisfied with your current provider, then the process can be quite simple: tailor your request for proposal (RFP) to illustrate the strengths of the firm (and even enlist their help in writing the RFP). However, if you truly are shopping for a new and better provider, here are a few questions and considerations that you should ponder throughout the process:

What Are We Looking For?

This can certainly vary based on the service that you are shopping. However, in most situations the institution should determine whether the selected firm can provide insight and value beyond the respective service being requested.

For instance, let’s take an external audit as an example. There are many firms that can “provide” this “basic” annual service. An important question to ask, therefore, is: does the institution simply want a firm that is seen or heard from one or two weeks per year; or an advisory firm that will be a business “partner” who provides industry insight based upon experience with other institutions?

Does Size Matter?

Depending upon the size and complexity of the institution, size of the accounting and auditing firm can make a significant difference. While larger firms will generally be more expensive, the extra cost is, in most situations, a function of more depth, experience, and specialization in the industry. One should not always equate size of the firm with expertise or level of service; however, it is an important consideration.

Once again, the service being shopped will dictate the expertise needed. If your institution is a multi-branch shop that operates in several states, and you are looking for a firm to provide tax services, you most certainly want to retain a firm that has extensive state and local tax experience within the various states that you operate. This is an explicit example of when a larger firm will be a better fit.

While there are many questions and considerations that need to be analyzed during the accounting and auditing firm selection process, the two considerations above will provide a good starting point for any board or decision-making body. The goal should be to obtain a high level of service at a reasonable price and to ultimately build a lasting business relationship that will benefit both parties.

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