Top ten mistakes audit firms make whilst tendering

Riskmonkey has had the pleasure of presiding over a number of procurement exercised for internal, external and IT auditors over recent years. I had been looking forward to writing some solid technical content this afternoon, but the latest round of printed PowerPoint presentations (complete with spelling errors) has reminded me what a frustrating task this often is.Knowing your stuff is not enough: If you work in practice and are involved in business development, bidding for client work, producing presentations, presenting to auditor appointment panels, or just want to come across well when explaining the role of audit to internal clients, here are my top ten mistakes audit firms make whilst tendering for audit contracts.

  1. Don't answer the questions. OK, I understand that you have a standard presentation. I know it's easy. But if we've given you a list of questions, you're wasting your time if you don't answer them directly. If I'm hiring auditors for a health trust I'm not interested in your achievements for the tobacco industry. If I'm hiring an internal audit service, I don't want to know how well reputed your external auditors are. If' we've specified the sections we want in the tender, stick to them.
  2. Forget to do your research. I know you have a business development person who does this for you, but really - you will have to stand in front of us on the day. If you don't know what our governance arrangements are, what our recent external audits said, or why we've been in the press recently, don't expect us to be impressed.
  3. Ask your kids for help. I'm really serious. One recent top-10 firm actually included a chart produced by ' my 12 year old son, he's better at computers'. How did we find them out? It looked like it had been produced by a 12 year old. In Microsoft paint.
  4. Change the team. I know your firm has a great reputation, or you wouldn't be on the shortlist. When I ask whether the people doing the presentation and listed in your tender are going to be the ones supplying the audit service, the answer I'm looking for is 'yes'. If its another partner and manager from another office, why are you here - because they're not up to it? Fortunately we'll never find out.
  5. Don't ask what we're looking for. If we've asked a number of questions about how you're going to work with the non-executives, we don't expect to hear that you'll speak to the audit committee and AC meetings and that's it. If we've asked what value you'll add to the finance or IT department, we don't want to hear that all audit is valuable, so we shouldn't worry about it. There's a reason for these questions - take them seriously.
  6. Understand you're USP. Not so long ago Riskmonkey asked five audit firms presenting what set them apart from their competitors and how that would add value for the organisation. You'd think people would prepare for that, but two audit firm partners had no answer at all, one was saved by a junior manager jumping in to stop his boss floundering, 1 saw an opportunity to criticise the competition for lax training standards, and only one had a positive answer. All were top 10 UK firms, several were big 4. No surprise who got the work.
  7. Forget you want to be reappointed. We know you'd like to be reappointed. Don't think we close our eyes when you get the job, reappointment is earned because you gain our confidence in that first term.
  8. Be honest. If you're new to our sector, expanding into our area and your audit team will travel 200 miles to get here and stay in a hotel, it won't fill me with enthusiasm - but being honest about it, demonstrating competence, understanding the organisation and showing enthusiasm will count for a lot, too.
  9. Understand our objectives. You can only help us manage our risk if you understand what impact those risks have on our operations. That's not always obvious without giving it some thought. Organisations don't just provide a product or service, they have real problems - rebuilding confidence after a crisis, demonstrating capacity to regulators, improving public perception, managing excessive headcount, reshaping capital structures.. take a minute to look under the surface and understand what we need to achieve.
  10. Be late. Riskmonkey was not impressed to find one organisation he serves on confronted with possible legal action for not taking into account a tender received after the deadline. I know post normally takes a couple of days, but don't count on it and expect us to understand - if it's a £50k job, it's worth a fiver for special delivery. And, to be honest, it's worth doing well before the deadline. Start as you mean to go on.