An audit is a process of checking how a company presents information in its Annual Accounts. Not all companies will require an audit and an audit is NOT the preparation of Annual Accounts.
Contrary to popular belief not every business transaction is scrutinised during the audit, that would take far too much time and expense. The auditor will select samples in each area and then test the sample. If errors are found then further samples in that particular area may be taken to complete verification. This sample testing will then allow the auditor to form an opinion on the “truth” and “fairness” of the Accounts.
If the auditor is happy that the figures are free from error then a clean or unqualified Audit Report will be issued. However, if the auditor is unable to verify the information presented in the Accounts, the auditor will issue a Qualified Report, and state in which area of the Accounts the problem(s) lie.
Will my company require an audit?
Every limited company must prepare accounts and submit them to Companies House. However, as stated above not all small companies will require a Statutory Audit.
The Statutory Audit thresholds are:-
Turnover/Sales …. £6.5m (Group £7.8m)
Gross assets ……… £3.26m (Group £3.9m)
Employees ……….. 50 (Group 50)
If your company exceeded 2 out of three of the above then it will require an audit. If your company is part of a small group then the “Group” figures will apply. However, please feel free to email us to determine of your company will require an audit.
In addition to a Statutory Audit, shareholders and significant lenders may also require that an audit is carried out, especially if they are not involved in the day to day running of the business and require reassurance that their investment is being properly looked after by the directors.
Finally, subsidiaries may be exempt from audit provided they fulfil certain conditions. Please contact us to see if your subsidiary company is exempt from audit.
How can I save money on audit fees?
Audits are expensive. For many companies it can be the largest outlay of professional fees during the year. At Westbury we understand this and our audit is geared to minimise our clients audit fees right from the start.
- Get a quote
Make sure you obtain a quote from your auditors and compare these to other firms. Before we visit you we will send an audit information request detailing the information we will require to inspect. If you have this information ready for us when we conduct our field work it will create efficiencies and allow us to adhere to our quote.
- Don’t change the figures!
It may be obvious but the more adjustments to the figures an auditor makes then the more time they will spend auditing and producing the final Accounts. At one recent audit our client sent us a revised trial balance midway through the audit. Most of the figures we used to plan the audit and select sample sizes had changed, it was almost as if we had to start over again.
- Give us your assistance
Work with us to complete your audit. Present information requested on a timely basis so we are present at your premises for the least number of days possible. This will then allow us to minimise time finalising our audit when we return to the office.
Westbury has a long history of auditing clients, from Solicitors Accounts Rules audits through to subsidiaries of large Multi Nationals. Contact me to discuss how Westbury can keep your company’s audit fees to an absolute minimum.
Tony Mann – Audit Manager
Westbury Accountants and Business Advisors is an accountancy practice based in London. Westbury have been providing Accounting and Tax solutions to small and medium sized businesses since 1936. Talk to the team at Westbury on 0207 253 7272 or visit http://www.westbury.co.uk.