Guide

How to choose an accounting firm

Eight checks you can verify yourself, whatever the size of the firm. Use them to build a shortlist from the directory, then to compare the proposals you get back.

  1. Write down what you need the firm to do

    Start with the job, not the firm. Is a lender asking for audited statements? Is a customer asking for a SOC 2 report? Do you need returns filed, planning for a sale, or someone to close your books every month? Each is a different service, and not every firm offers all of them.

    See the services explained in plain terms.

  2. Check the license

    CPA firms and CPAs are licensed by state boards of accountancy. Only a licensed CPA firm can issue an audit, a review or a SOC report. Look up the firm and the partner who would lead your work on CPAverify, or on your state board’s website if your state isn’t on CPAverify. Check the license is active and that no disciplinary actions are listed.

  3. Ask for the peer review report

    Firms that perform audits, reviews and other attest work are generally required by their state board to go through peer review, usually once every three years. A “pass” is the best result; “pass with deficiencies” and “fail” mean the reviewer found problems. Ask for the latest report and the firm’s response to any findings. You can also look it up through the AICPA peer review program.

    If you are a public company or a broker-dealer, your auditor must be registered with the PCAOB. Look the firm up in PCAOB AuditorSearch and read its inspection reports.

  4. Confirm experience in your industry

    Every industry has its own rules: Medicare cost reports for skilled nursing, HUD filings for affordable housing, investor and agency audits for mortgage lenders, revenue recognition for software, Single Audits for nonprofits. Ask how many clients like you the firm serves today, which partner leads that work, and whether you can speak with one of those clients.

    Find firms by industry.

  5. Agree who will do the work and how often you'll hear from the partner

    The partner you meet in the proposal meeting may not be the person you talk to in March. Ask who your day-to-day contact will be, how quickly they reply, when the partner is involved, and how staff turnover on your account has been handled for other clients.

  6. Check independence if one firm does several jobs

    A firm that audits you is limited in the other work it can do for you. If you want the same firm for your audit and for bookkeeping, tax or consulting, ask how it keeps the audit independent, and get the answer in the engagement letter.

  7. Get fees in writing, with the basis

    Accounting fees vary with the work, the size and condition of your books and the firm’s market, so this directory doesn’t publish prices. Ask each firm for a written proposal that says:

    • whether the fee is fixed, hourly or a monthly retainer;
    • exactly what is included, and what would be billed on top (extra meetings, notices, late records);
    • how fees change from year to year;
    • what happens if the work takes longer because records arrive late.

    Compare at least two or three proposals for the same scope of work.

  8. Read the engagement letter before you sign

    The engagement letter is the contract: the services, the deliverables and deadlines, the fees, who owns your records, and how either side can end the engagement. If something you agreed in the meeting isn’t in it, ask for it to be added.

Questions to take to every first call

  • Who will sign our work, and are they licensed in our state?
  • What was the result of your latest peer review?
  • How many clients like us do you serve, and can we talk to one?
  • Who is our day-to-day contact, and how often will we speak with the partner?
  • How do you bill, what is included, and how have fees changed for similar clients?
  • When will we get the finished work, and what do you need from us to hit that date?

Each firm’s profile in the directory adds the questions specific to its services and industries.