Audit: what, why, how + when?
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What and why?
An audit is undertaken annually to validate an organisation’s underlying accounting records for accuracy, integrity, and risk.
The audit is detailed, and process driven to ensure the auditor meets all aspects that are required to form an audit opinion on whether the financial statements give a true and fair view.
An unmodified audit opinion gives our clients a level of assurance that their financial statements are materially correct.
How?
A planned process identifies various aspects of risk associated with an entity’s financial affairs.
Review and rigorous testing are applied to underpin the overall results, performance and integrity of the financial statements. Only after applying robust methodologies to the underlying transactions can the auditor then give an independent opinion to the shareholders on the truth and fairness of the financial statements.
Collaborate
Onboarding process
Fees agreed and expectations set by both parties around the audit and our approach.
This will also cover:
- Engagement letters being issued
- Anti-money laundering procedures (passports, beneficial owners identified)
- Timing of audit and communications around this
Planning
Senior team member would collaborate with the client to go through systems, controls and assess risks with the client.
Care
Fieldwork
We will undertake the audit testing (substantive testing and assess tests of control).
Reassure
Completion
The audit testing and file will be completed and reviewed by the Responsible Individual, this will determine the opinion to be issued on the audit report along with the associated documents (for example management letter, letter of representations etc) and a meeting will be held if agreed at the onboarding stage.
When?
An audit of an organisation may be necessary to ensure compliance requirements are met, to provide assurance to stakeholders.
Companies (not charities) that have or exceed any two or more of the below criteria for two consecutive periods are legally required to have a statutory audit of their company:
- More than 50 employees on average
- Gross assets worth more than £5.1 million
- An annual turnover of more than £10.2 million
For charities, whether incorporated or unincorporated, the the audit thresholds are:
- Gross income of more than £1 million, or
- Gross assets of more than £3.26 million
I would not hesitate to recommend Byrd+Link as auditors to any SME business, as well as to larger organisations with varying UK requirements within a group structure, and have been pleased to make successful introductions in the past.
A better audit experience with Byrd + Link.
Learn about our tailored services for:
UK subsidiary and ‘cost plus’ company audits.
Not-for-profit organisations and Academy schools.
Statutory audits for companies and groups.
Audit services for accountancy firms.