Audits are mandatory for public companies; private companies don't have to conduct audits unless a bank or an outside investor requests one.
Accountants might handle an audit for a private company, for example, that is looking for funding from investors who want to have an independent opinion on the fairness of the company's books, financial statements, and financial position.
Most audits can be divided into two phases: the accounting work done to prepare for the audit, and the audit itself.
Make sure it's clear in the beginning what you're paying for. While some accountants will give you cost estimates for these two aspects of the audit, others will simply give you one estimate for the audit and add-on costs at the end for the preparation.
Here are a few things to consider when trying to hold down the cost of an audit, one of accountants' more expensive services because of the detail and time that is usually involved:
Do some of it yourself. Have your in-house staff prepare the necessary documents for the audit. This cuts down the preparation time that your accountant would have otherwise spent just getting things in order for the audit - time that you would have been billed for.
Hand over clean books. The cleaner and clearer the books, the less time it takes for your accountant to get through all the paperwork.