Certain other companies may also require an audit. A flat management company may need one to comply with the terms of a lease. Charities are subject to more stringent rules on audit exemption. Tour operators may require audited accounts in order to obtain an ATOL license. Even if your accounts do not require an audit, it may often be advisable to have one if you require loan finance or wish to attract investors. Please refer to our information sheet on Audit Exemption for further details.
If your company does require an audit, you should appoint an auditor well in advance of your year end and ensure that the audit can be completed before the filing deadline for your accounts. If it is the first year that your accounts are to be audited, the auditor will need to spend a lot of time gathering information on your business and accounting systems. It should also be noted that a clean audit report is not a foregone conclusion. Auditors can and do qualify their reports if there are any material uncertainties about the business, such as going concern, or if they have not received all the information and explanations they consider necessary.
Auditors will expect you to provide them with sufficient evidence to support the figures in the accounts. This will include both third party information such as supplier invoices and bank statements and internally produced lead schedules such as an analysis of trade debtors or creditors. This work should be done as soon as possible once the draft accounts are prepared so the audit can commence in good time.
Accounts that have not been audited are often accompanied by an accountant’s report. This is little more than a branding exercise as the report will explicitly state that no audit has been carried out and that no opinion is expressed on the accounts. However, they do provide some assurance to third parties that the accounts have at least been prepared by a qualified accountant.
Accountants are often asked to provide other types of report on behalf of their clients. The most common of these is mortgage references. For self employed people these are usually based on accounts for the last 3 years and the accountant may be asked to comment on the figures and express an opinion as to the ability of the applicant to repay the loan. Landlords usually ask for similar references before granting a lease, suppliers may want to see the latest accounts before allowing credit terms, and you may also be expected to provide a reference from your accountant when you tender for a new contract.
At Acumen, we can supply our clients with any reference they may need to conduct their trading activities and provide any further information that may be necessary. We do not carry out statutory audits ourselves but have close links with firms that do and can find an auditor suitable for your business. We can also prepare all the audit schedules for you and liaise with the auditor until the accounts are ready to be signed off. Please give us a call if you need any help with your audit.
