Two-thirds of clients ready to change auditors

More than two-thirds (70%) of U.S. audit clients are ready to change firms within the next three years, according to a new report.

Inflo’s “Creating a New Audit Experience for U.S. Businesses” report found that 34% of respondents said they are “very likely” to switch auditors in the next three years, 36% are “somewhat likely” and 15% are “not sure.” The remaining 14% of respondents were evenly split in saying switching was “somewhat unlikely” or “very unlikely.”

Clients with the most employees (250 employees or more) were the highest to report it was “very likely” they would switch firms. Meanwhile, clients with fewer employees (less than 50 employees) were the highest to report it was “very unlikely” they’d switch firms.

By far the most common reason causing a client to look for a new firm was high fees (44%). When asked how much more clients would be willing to pay for an audit that “gave you more value,” respondents answered 5-10% more (33%), 11-20% (31%) and 21-30% (14%). Five percent of respondents answered “nothing.”

Subsequently, clients said the leading factors influencing their decision to accept or resist fee increases were perceived value and quality of service (42%), relationship with the audit firm (40%), meeting deadlines (39%), level of justifications and transparency regarding an increasing (35%), responsive communication (35%) and the frequency of previous fee increases (34%). 

(Read more: Average audit fees grew 6.41%)

The second most common reason causing a client to switch auditors was communication (28%), followed by quality and rigor of the work (24%), technical knowledge and support (22%), project management (21%), lack of innovation (21%) and lack of technology adoption (20%). Sixteen percent of respondents reported, “We are not experiencing any issues.”

“This research makes one thing clear: U.S. businesses are demanding a better audit experience,” Inflo CEO Mark Edmondson said in a statement. “From high fees based on outdated pricing models to technology that hasn’t changed since the 1990s, the approach of many audit firms is driving business away.”

Additionally, nearly half of respondents (45%) said they’d like auditors to improve on the use of technology to add more value to their audits, followed by the time needed from their team and insights on their organization (38% each).

“The good news is that clients care about their audits. They want them to play a key role in driving operational improvement and consistent business growth,” Edmondson said. “Audit firms that act on the report’s findings will be rewarded with rising fee incomes and a continually growing client base.”