I’ll never forget my first interview with Gene O’Rourke, the managing partner of what was then a small CPA firm in Hayward, CA. The firm was an offshoot of the audit division of the California Credit Union League. The year was 1977. I didn’t know much about credit unions or CPA firms. I asked about the firm’s strategic direction, and the answer Gene provided made sense. He spoke about the growth in the industry and his belief that credit unions would need to transition to opinion audits performed by CPAs.
Gene and his partners at the time – Ed Hoveland, Bill Onesta, and Steve Roe – understood the business opportunity of specialization. But the most energized point Gene made in our first meeting was contrasting his experience working as an auditor for a “Big 8” firm and for a Fortune 500 company. He promised our audit staff would become experts in credit unions. We would be more than auditors, we would be consultants. And our clients would view us not as an administrative nuisance, but as trusted advisors.
Fast forward to 2010. Much in the credit union world has changed. And in the post-Enron environment, CPA firms operate differently today than in 1977. But some of the fundamental beliefs Gene and my partners shared are as applicable today as they were 30 years ago, some even more so.
So if you are evaluating your credit union/auditor relationship today, tomorrow, or next year, here are 6 important questions to ask.
1. Does your CPA firm specialize in credit unions? Credit unions are different from banks and other financial service companies; therefore, I would want my auditor to specialize in this industry. There are many firms that can meet this benchmark, some are “boutique” firms and others are national firms with specialized divisions.
2. Are the partners and staff assigned to your engagement seasoned specialists? Many firms talk the talk but end up assigning staff and partners that don’t have the commensurate experience in serving credit union clients.
3. Does the firm take a consultative approach to the audit? Or is it so caught up in its internal bureaucracy that it spends more time dotting the i’s and crossing the t’s, resulting in a non value-added engagement?
4. Does your firm prioritize service over fees? Or do the issues of fees arise over every bump in the road?
5. Is your audit engagement delivered in a timely manner with appropriate pre-planning and discussion with the management team?
6. Do you look to your CPA firm as a trusted advisor who can offer advice on a range of financial topics? Can your firm also provide insight and education to your Supervisory Committee and Board of Directors?