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Sunday, Jul 21, 2024

Audits Grow More ‘Ugly,’ Expensive

FloQast, the Van Nuys accounting software developer, released the results of a survey last month that showed audits are becoming more costly and burdensome for companies of all sizes. Conducted in conjunction with Dimensional Research, a Santa Clara County market research company, the survey titled “The Ugliness of the Audit” was based on feedback from more than 200 financial audit stakeholders. Key findings in the survey include that audits are becoming more expensive. Fifty-three percent of the respondents said there had been substantial increases in audit costs in the past two years driven primarily by new accounting regulations. Another finding was the audit process places a big strain on finance and accounting departments, with 95 percent of the respondents stating they faced challenges with their audits. Eighty-two percent said the audits conflicted with regular work duties while 50 percent said dealing with the stressful time has a personal impact on their staff. Sixty-six percent of respondents said their controllers and chief financial officers live with persistent fear that they may have missed something in their financials that will come under the scrutiny of auditors. FloQast Chief Executive Mike Whitmire said the survey validates what the company’s staff hears from customers daily – that an audit has become a black hole that sucks money, time and morale from accounting teams. “FloQast’s goal is to provide controllers and CFOs with the financial software and tools that drive more efficient audits, meaning less billable hours by auditors and a quicker return to focusing on what really matters, and that’s running the business,” Whitmire said in a statement. Close management software, such as that developed by FloQast, can provide improvements to the audit process for 91 percent of the survey respondents that use it. Eighty-nine percent said they would benefit from additional software capabilities during an audit. Whitmire founded FloQast in 2013 and it moved from North Hollywood to Sherman Oaks before settling in Van Nuys with its more than 100 employees. The company’s software was built out of what Whitmire experienced when he was an accountant with EY doing the books for midsize public companies and later a startup that went public. One appeal of the software is that it’s built for accountants by accountants.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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