If Your Firm Were Audited

Source: Redzone, Play of the Month

If your firm were audited, would the opinion include a succession concern? Would the auditor be required to identify existing conditions that indicate substantial doubt about the firm’s succession plan?

These considerations could be divided into the same four categories applied in SAS No. 59:

Negative trends related to succession plans for client service partners, accountability for achieving the firm’s goals, etc.
Possible future financial difficulties, e.g., unfunded partner buyouts.
Not managing the firm like a business.
Consolidation in the profession, creating intense competition for clients and talent.

Management should take the steps necessary to avoid a “succession concern opinion.”

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From RedZone, Play of the Month, Accountants Advisory Group LLC, www.accountantsadvisory.com, September 2008.