Put Your Audit Firm To The Test
By Edmund Cartwright, Auditor, Johnsons Chartered Accountants
In part five of our blog series on Assurance and Audit, we challenge you to challenge your Audit provider! Here’s a simple checklist of things to consider and verify before you place your Audit in the hands of a firm of Auditors.
Our Essential Audit Checklist
- Check the Register of Auditors the official register of qualified, Statutory Auditors
- Ask about the size of the audit team. A one-man band may not be capable of meeting your deadline, especially if he falls ill. There are also severe staff shortages in the Accountancy industry, so in a small to medium-sized firm, ensure that the team is fully staffed.
- Can the Auditor provide you with a completed audit at the time of year that you need it? This might be the deadline for consolidation within a group of companies, not the statutory deadline.
- Check that the firm itself is regulated. We’re regulated by the ICAEW, which licences, regulates and monitors our work.
- Ask for a quotation in advance, and make sure you ask about the rates for any additional work should it be required.
- Don’t assume that bigger is better. Top 4 firms typically charge six or seven times the fees of a small to medium sized audit firm such as ourselves. They engage large numbers of graduates for Audit work, whom they charge out at rates equivalent to a Partner in a smaller practice.
Think About Why You Need An Audit
Finally, consider why you need an audit.
Is it for external investment, or to list the business in future? Or is it just a statutory tick box?
If it’s the latter, and they can meet the requirements of the checklist above, you can probably engage any Statutory Auditor. However if the audit must satisfy a potential lender, or future investors, ensure you select a firm with broader understanding of what investors and lenders require.
We act for 20 PLCs. We have a client who trades debt on the LSE, and we work with many well-known household names who see Johnsons as a valuable brand on their audit report. Few audit firms in our tier have such high-profile clients.
We also have a team of over 10 experienced, ex top 4, ex top 15 auditors who work specifically on audit. We can also refer you to a range of other professionals within Johnsons for further advice, such as the client in the Case Study below.
Case Study – Audit & Patent Box Tax Relief
The Client: A new client that had invented and developed an innovative security product.
The Brief: We were called in to carry out a statutory Audit.
The Solution: The company was already aware of its entitlement to R&D Tax Credits, but we also identified the opportunity to use Patent Box Tax Relief, which reduced their Corporation Tax liability from 19% of profits, to 10% of profits.
Contact the expert team at Johnsons, a leading firm of Auditors in Ealing for audit advice.
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