Working for your company's future
Auditing like much of accountancy jargon sounds expensive and off putting, well it shouldn’t be.
What is a statutory audit?
Put simply, a statutory audit is an independent assessment/overview of the financial accounts of a company. The auditor’s role is to report on whether the financial statements issued by a company are ‘true and fair’ and meet all relevant guidelines or legal requirements.
Not all companies or organisations must have a statutory audit. Small companies are usually exempt, unless they are charities (which must follow the specific guidelines for that sector) or members of a wider group
To be exempt from audit, a small company must meet two out of three of the following criteria for two consecutive years (or its first year for new companies):
Turnover should not be more than £10.2m
The balance sheet total should not be more than £5.1m
The average number of employees should not be more than 50
There are other exceptions to when audit exemption applies. For detailed guidance give us a call so we can carefully review if you are exempt. There are heavy fines for failing to comply with auditing regulations, so it’s important to be absolutely sure of your obligations.
Contact the leading accountants in Bolton today to discuss how we can help with your auditing requirements.
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Frequently Asked Questions
What is an audit?Put simply, an audit is an effective way to examine businesses financial records and is performed by a registered auditor – either someone in-house or a third-party, like our experienced accountants here at Eve Accountants. Auditing is done through a systematic review of your transactions – looking closely at your financial statements and accounting books. The purpose is to establish whether the information presented in the financial report reflects the financial position you’re currently in and to identify material misstatements.
Why is auditing important?You might think that an audit is the last thing your business needs, but the importance of auditing is not to be overlooked. After all, it ensures that your company complies with accounting standards and company law. Having an audit conducted regularly will:
- Ensure compliance – an audit must be carried out regularly to make sure that corporate Quality Management Systems (QMS) are ISO 9001 compliant. According to the international QMS standard, external audits must be carried out once a year, whilst internal examinations should be done more frequently to ensure that the standards are maintained between the external audits.
- Improve internal systems and controls – an auditor’s job is not just to focus on the numbers but to gather an understanding of your systems and controls. In doing so, they can spot deficiencies and offer recommendations on how to make your business more efficient and less prone to fraud and/or errors.
- Provide credibility – having a fresh pair of eyes to check your financial statements are accurate can provide you with the peace of mind that your accounts are in order. What’s more, it can help you to gain credibility in the business world should you choose to finance or sell your business in the future.
- Give shareholders confidence – most small businesses are run by a board of directors (on behalf of shareholders). Whilst shareholders tend to have little involvement in the daily operations of the business, an audit will prove to them that the company is being run efficiently and can highlight any issues or errors that they may not have been informed about.
Can Eve Accountants help with my auditing requirements?Absolutely! As an experienced accountancy firm in Bolton, we offer a comprehensive range of services and have helped many small start-up businesses and established corporations to keep their records of transactions in an orderly fashion. This enables auditors to easily access them and to get a clear view of your business operations. We are well aware that not all companies will require a statutory audit and, in most cases, small businesses are exempt. However, failure to comply with auditing regulations could result in a costly fine. So, if you think your company might be one of the lucky ones that doesn’t need an audit, but aren’t 100% sure – be sure to get in touch with us today. We can arrange an appointment to discuss your requirements in further detail and guide and advise you on the best way to:
- add value to your business
- develop strategies to drive your business forward
- reduce risk
- secure peace of mind