A public company’s external auditor is an important aspect of a company’s overall corporate governance. A company with good corporate governance will engage a qualified audit firm and provide appropriate levels of funding to ensure that a quality audit can be conducted. Therefore, it is important to understand a company’s relationship with its audit firm and how the relationship changes over time.

In this article, Audit Analytics looks at the auditor-specific aspects of its Accounting Quality + Risk Matrix (AQRM) and explains why some may be considered red flags.