Case Study: Enhancing Audit Quality and Efficiency

Background:

The client is a mid-sized finance and accounting firm in Australia that provides a wide range of services, including audit, tax, and advisory services, to clients across various industries.

The firm's increasing client base, staffing limitations and the high cost of experienced professionals made scaling a significant challenge and threatened its ability to deliver high-quality audits. 

Challenges:

1. Resource Overload: As the client’s business grew, the client's audit team remained the same size, leading to a stretched bandwidth. Managing multiple engagements simultaneously, especially during peak periods, while maintaining excellent standards became difficult.
2. Inefficiency: The existing manual and time-consuming auditing process contained some inefficient areas and slowed down audit completion, further straining resources.
3. Time Pressures: The resource limitation and expanding client expectations created intense pressure on the team to continue to complete processes within the previously established timeframe, raising concerns about potential quality compromises and employee stress.
4. Cost: Expanding the team or investing in advanced accounting tools/ automations were seen as cost-prohibitive solutions. Finding an alternative was crucial.
5. Business expansion: The client aimed to manage their growing client base and required support in strategizing their expansion in a way that wouldn't strain existing resources.

Impact:

These challenges threatened the Client's ability to:

• Effectively manage risk: Limited resources and expertise could have led to overlooking crucial risks in audits.
• Maintain audit quality: Time constraints and pressure could have compromised the thoroughness and accuracy of audits.
• Sustain growth: Inability to manage the growing workload could have hindered the company's expansion plans.

The company contacted us to explore a cost-efficient solution to tackle their challenges. At H Connect International, outsourcing goes beyond mere cost savings; it's about opting for a solution that improves our current business processes and consistently delivers added value.

Solutions:

We implemented the following solutions to with our clients goals and vision in mind:

1. Resource Augmentation: We provided a team of seasoned auditors with specific skills and industry expertise, ensuring efficient resource allocation for each engagement. This addressed the resource related challenges.

2. Technology Integration:

We implemented tools and software to streamline audit workflows, including:

• Power BI and data analytics: This enhanced efficiency and provided deeper insights into the client's financial data.
• Macros for automation: We achieved over 90% reduction in time for repetitive tasks like random sampling, MUS sampling, quantitative analysis, and sheet generation by automating them with macros. This significantly reduced manual processes and minimized errors.

3.Time Zone Optimization: We leveraged our teams in Sri Lanka, to maximize the limited log-in window available for the client's financial software used for the preparation of financials. This helped alleviate time constraints and pressure on the client's internal team and maximized use of the software (12-15 hours per day). 

4. Exchange Rate Advantage: Sri Lanka has the advantage of leveraging a favorable exchange rate and a lower cost of living compared to Australia. This allows us to offer our clients highly skilled auditing professionals at significantly lower costs. Compared to hiring directly in Australia, the Client saved up to 70% on the hourly rate.

5.Efficiency through Expertise: Our team is comprised of seasoned professionals with combined experience exceeding 14 years with the Big 4 audit firms. We combined industry best practices with our team's collective knowledge and after the initial 3-6 months of discovery and integration we implemented optimized processes allowing significant time savings.

6.Client Acquisition Support: We assisted the client's business expansion by identifying potential leads. Through comprehensive online searches, we identified qualified prospects aligned with the client's standards and conducted financial analyses to pinpoint areas for improvement of the end customers.

Outcome:

Impact on Efficiency and Speed:

1.Automation Power: 

Technology integration and automation yielded significant time savings:

• Quantitative analysis from 2 hours to 2 minutes (99% reduction)
• MUS sampling from 15 minutes to 1 minute (93% reduction)

2.Optimized Tool Usage: 

By capitalizing on time zone differences, we increased the client's financial software utilization from 8 hours to 16-17 hours, maximizing its value and reducing costs to our client. This led to increased operational efficiency and enhanced client satisfaction.

3.Enhanced Productivity: 

One of our three-person audit teams completed 75 successful external audits in 2023, including group audits and providing expert assistance for 11 financial statement preparations. This demonstrates an impressive number of audits per team member per year, showcasing superior productivity.

4.Cost-Effectiveness:

• Significant Savings: Partnering with us unlocked 70% cost reduction due to outsourcing to Sri Lanka. This represents a substantial financial benefit for the client.
• Resource Optimization: Our efficient resource allocation allowed us to achieve the same results as a larger team, saving the client considerable costs. This freed up funds for the client to invest in other critical areas of their business.

Going Beyond Expectations: Client Acquisition Support

While our initial engagement focused on optimizing audit efficiency, we recognized the client's desire to expand their client base. 

Taking a proactive approach, we went above and beyond by:

1. Identifying over 20 potential clients through extensive online searches and targeted lead generation efforts.
2. Implementing a rigorous vetting process to ensure these prospects aligned with the client's processes.
3. Conducting comprehensive financial analyses to pinpoint areas for improvement and value proposition development to the end client.

This value-add not only supported the client's immediate audit needs but also positioned them for successful expansion into new markets and client segments, and is a demonstration of how we operate as a true extension of our clients enterprise. 

In summary, the partnership between us exemplifies the competency of the trained professionals at HCI in enhancing audit quality, efficiency, and client satisfaction. By leveraging our expertise, integrating auditing tools and resource optimization, our client was able to overcome their challenges, experience significant efficiency savings and achieve sustainable growth in their audit practice. 

At H Connect International, we understand that each business is unique, and so are our solutions. Our commitment lies in providing tailored solutions that align perfectly with the individual needs and goals of each client.