Audit and Risk Committee Questions Ex-CFO Directors Should Ask the Auditor

Former CFOs know where audits can go wrong.

They have sat on the other side of the table. They have negotiated audit fees, argued over judgements, resolved late adjustments and managed the relationship with the audit partner. That experience is valuable on an audit and risk committee.

Used well, it helps the committee get far more from the external audit. This article covers why the auditor relationship matters, the questions to ask on scope and risk, on management and judgement calls, how to use private sessions, how to read the auditor’s report and the mistakes to avoid.

Why the auditor relationship matters to the committee

The external auditor gives the board independent assurance on the financial statements. The audit and risk committee oversees that relationship. A strong relationship helps the committee:

• Understand the key risks in the accounts

• Test management’s judgements

• Identify control weaknesses

• Get early warning of problems

Ex-CFO directors can make this relationship much more effective. See CFOs as audit and risk committee chairs.

Questions on scope and risk

At the audit planning stage, ask:

• What are the key audit risks this year, and why?

• How has the audit plan changed from last year?

• Are there any areas you are not planning to cover that we should know about?

• How are you approaching new accounting standards or major transactions?

• Is the audit fee appropriate for the scope? Is anything being cut to meet it?

• How much of the audit relies on the work of other auditors or experts?

Questions on management and judgement calls

At the results stage, ask:

• What were the most significant judgements in the accounts?

• Where did you and management disagree, and how was it resolved?

• Are management’s estimates at the conservative or optimistic end of the range?

• Were there any unadjusted errors? Why were they not corrected?

• Did management give you everything you asked for, on time?

• How does the quality of the finance team compare with similar organisations?

Private sessions without management

Most audit committees hold a private session with the auditor without management present. This is one of the most valuable parts of the process.

Ask:

• Is there anything you would like to tell us that you could not say with management present?

• How would you describe the culture in the finance team?

• Did you face any pressure from management?

• Are there any concerns about the CFO or finance leadership?

• What would you change if you were us?

Keep these sessions regular. They are less awkward when they happen every time, not only when there is a problem.

Reading the auditor’s report

The auditor’s report includes key audit matters for many organisations. Read them closely. They tell you what the auditor saw as the most significant risks.

Ask:

• Why were these matters chosen?

• How were they addressed?

• Do they match the risks the committee sees?

If the report includes an emphasis of matter or a modified opinion, make sure the committee fully understands why.

Mistakes to avoid

• Re-doing the audit. Your role is to oversee, not to audit.

• Siding with management by habit. Former CFOs sometimes instinctively defend management.

• Siding with the auditor by habit. Equally, do not assume the auditor is always right.

• Asking only technical questions. Ask about culture, people and process too.

• Skipping private sessions. They are where the most useful insights often come from.

Managing auditor independence

The committee also oversees the auditor’s independence. Ask about non-audit services, partner rotation and how long the firm has audited the organisation. Consider an audit tender at sensible intervals.

Supporting the CFO

Good audit committee members also support the CFO. They help resolve disagreements fairly and make sure the finance team has the resources it needs. Former CFOs are well placed to do this.

How search consultants view this experience

When I was in executive search, chairs often looked for ex-CFO directors who knew how to work with auditors. Directors who could describe how they had improved audit quality, resolved disputes and used private sessions well stood out for audit committee roles.

Your board CV

Show audit committee contributions with outcomes. “Member of the Audit and Risk Committee. Led the committee’s review of the external audit tender, resulting in a new auditor and improved audit quality.”

See moving from CFO to board director for the wider shift into board work.

A quick self-check

At your next audit committee meeting, check whether you asked at least one question about scope, one about judgement and one in private session. If not, prepare them for next time.

Questions on the finance team

The auditor sees the finance team up close every year. Their view is valuable. Ask:

• Does the finance team have the skills and capacity it needs?

• How has the team handled change, such as new systems or acquisitions?

• Are there key-person risks?

These questions help the committee spot risks in the finance function early.

Questions on technology and data

Many audits now rely heavily on systems and data. Ask:

• How reliable are the systems that produce the numbers?

• Were there any IT control issues?

• How are you using data analytics in the audit?

The audit tender

Every so often, many organisations tender the audit. Ex-CFO directors are often well placed to lead or support this. A good tender process looks at quality, independence, the team and fees, not just price. If you lead one, it makes a strong line on your board CV.

When the auditor and CFO disagree

If the auditor and CFO disagree on a significant judgement, the committee needs to understand both views. Ask each to explain their position. Focus on the evidence and the standards. The committee’s role is to make sure the final position is reasonable and well supported.

A quick tip

Meet the audit partner once a year outside the formal meeting, with the committee chair’s agreement. It builds a stronger, more open working relationship.

Common questions

Should ex-CFOs chair the audit committee? Often, yes. But they must avoid becoming a second CFO in the room.

Interview preparation

When you interview for audit committee roles, expect questions about how you work with auditors. Prepare an example of a time you challenged an auditor’s view and a time you supported the auditor against management. Showing both builds trust.

Your profile

Example: “Former CFO and audit committee member known for constructive auditor oversight, including an audit tender and regular private sessions that improved audit quality.”

A note on tone

Keep private sessions relaxed and open. Auditors share more when they feel the committee wants the truth, not a performance.

After the audit

Once the audit is complete, ask the auditor and CFO together what could make next year’s audit smoother. Small improvements each year add up to a much stronger, faster process over time.

Your next step

Pick three questions from this article and bring them to your next audit committee meeting. Ask at least one in the private session with the auditor.

If you want a board CV that shows your audit committee value, my board resume writing is built for senior leaders across Australia and New Zealand.

If you are building towards audit committee chair roles, book a complimentary Clarity Session.