Cooperation of management boards and auditors

This article addresses the following questions:

• Does an auditor have to communicate with the management board?
• Why is it advisable to rely on the expertise of statutory auditors when running a business?

A few years ago, financial audits in Poland were often considered a necessary evil and yet another burdensome obligation. Fortunately, this perception has begun to change. Statutory auditors carrying out mandatory audits of financial statements are increasingly viewed as advisors whose expertise can support company operations. What is, then, the nature of the relationship between management boards and auditors in such cases?

A well-conducted audit requires close cooperation with the auditor

RSM auditors have frequently encountered situations where company management openly shared their business challenges with them. Only a relationship based on openness and trust – and treating the audit firm as an experienced business partner – can bring tangible benefits to the organisation undergoing mandatory audit and positively impact both the collaboration during the financial statements review and the company's future performance.

Concealing problems from experts and sweeping them under the rug offers no benefit, on the contrary – it may lead to errors and decisions that could result in significant financial losses for the company or even expose management board members to liability.

Transparency and openness on the part of the management board provides great support to the auditor, primarily because the financial audit goes far beyond mere Excel sheets and numbers, but also involves a series of meetings and discussions with the management board, allowing the auditor to better understand the company's situation and the procedures in place.

The difficult situations auditors face include, on the one hand, complex tasks related to auditing accounting records and financial reporting, and, on the other, activities related to persuading company management to engage in the process and work collaboratively on analysing the company's current standings. Modern auditing is no longer just about verifying historical financial data; it also involves activities that allow for the control and assessment of management's activities, ensuring the transparency and credibility of financial documents that form the basis for business decisions.