Before monetarist economists tookover the world in the early 80s, auditors and indeed accountants were generally just that. Peeps who did audit and accounts. The new economic era saw them downgrade these vital functions and effectively become consultants. They sort of figured there was no growth in just doing their core jobs. So what you then got if you employed an auditor to review your accounts and give you the greenlight to publish your accounts was a
- firm sends its trainees to look at the accounts and ask the questions. Most although they have some accounting knowledge would be very irritating. No knowledge of your business, of your accounts, processes etc. So you would get basic questions like why did your income grow from last year? Why do you recognise such revenue? These would be the same questions every year because they would be new pack of trainees!
-you'd then get a senior manager who'd on the basis of the information gathered pass your accounts but propose a series of improvements or audit points that he/she thinks you should make and further that the firm can recommend ways of doing this very cheaply.
-But it'll cost you for the additional time. This is the consultant piece which most (and especially the big 4) make their revenue from.
However, with a recession and one driven by credit drought, auditors and accountants will need to be careful that they don't sign-off accounts only for the said company to collapse the day after as has already happened severally. But qualifying accounts comes with a rider, the firm could lose that auditing contract. Still at least, they will have to start earning their money....