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Audit and Assurance: How We Can Help
26 September 2023
Audits are often seen as a painful but essential process. If you’re below the audit threshold, your business doesn’t require a statutory audit. But for many, an audit is a necessity, and if an audit goes wrong, it’s a nightmare. Unfortunately, this does happen – just look at Patisserie Valerie.
In 2019 the café chain fell into administration due to an accounting scandal, and two years later its auditors were fined £2.3m for their error. Even the Big Four (Deloitte, KPMG, PwC and EY) have been subject to a series of inquests over their book-keeping, resulting in perceived ‘high risk’ clients being given to smaller competitors.
WHAT CAN GO WRONG WITH AUDITING?
Auditors can be liable for different types of liability:
- Civil offences – under contract law, parties can look for remedy if they think contractual obligations have been breached. And under the law of tort, auditors can be sued for negligence if they breach a duty of care towards a third party if they suffer a loss.
- Criminal offences – auditors can be prosecuted for acts including insider trading and fraud.
So, we can see auditing errors can prove extremely costly, which adds another element of scariness to the procedure. What’s the solution?
WHEN DOES MY COMPANY NEED TO HAVE AN AUDIT?
First of all, you need to know if you qualify for an audit in the first place.
Private Limited Companies – Your company will need an audit if it meets two out of the three criteria:
- You have a turnover of more than £10.2 million.
- You have assets worth more than £5.1 million.
- You have more than 50 employees.
There is a two-year rule for private limited companies, which means your business will need to have ticked two of the above boxes for two out of three financial years (the current accounting year and the previous two).
Charities – Your charity will need an audit if it meets one of the following:
- You have an income of more than £1 million.
- You have gross assets of more than £3.26 million, and a turnover of £250,000.
There is no two-year rule for charities.
HOW WE CAN HELP
Our team of auditors can take that fear factor away with their knowledge and experience in financial reporting for a diverse range of industries, including:
And that’s just a few of the industries we’re experts in.
Whether getting an audit is a statutory obligation, a way to gain peace of mind, or to enhance your financial credibility, it doesn’t need to be painful.
We’ll work with you to gain a responsible second opinion and a separate view on how your business is operating. We can help you move forward by highlighting risk and exposure.
Our audit team, led by Head of Audit Frances Howard, has worked for many SMEs and large businesses. They have a wealth of experience – more than 40 years combined – in financial reporting for a variety of sectors.
GET IN TOUCH
If you’d like to know more about audits and assurance, and why we’re the team you need, talk to us at 0333 173 5279 or drop us an email.