Need an audit?
It is a common misconception that all companies need an audit, but if you do require one then Friend & Grant Ltd is registered to carry out audit work in the UK by the Institute of Chartered Accountants in England and Wales.
Details about our audit registration can be viewed at the Audit Register http://www.auditregister.org.uk under reference number C001228651.
We are well suited to assisting SME businesses or charities which require a statutory audit. We do not deal with PLCs or large businesses or groups where there are significant overseas group members. Our expertise lies with businesses and charities with turnovers up to say £25m.
An audit is an examination of the financial statements of an organisation by someone independent of that organisation.
The financial statements include a balance sheet, an income statement, a statement of changes in equity, a cash flow statement and notes comprising a summary of significant accounting policies and other explanatory notes.
The purpose of an audit is to form a view on whether the information presented in the financial statements, taken as a whole, reflects the financial position of the organisation at a given date.
An audit is not confirmation that every transaction is correct.
As an auditor we plan our work by talking to management, reviewing the financial statements and understanding the business’ internal systems and controls. We identify the areas of risk that could have a significant impact on the financial position or financial performance of the business. Based on that assessment we sample test supporting evidence. Finally, based on all the evidence we gather we write a report confirming that we have carried out sufficient work to say whether or not the financial statements provide a true and fair view of the financial position and performance of the business.
True and fair means that the financial statements are free from material misstatements and faithfully represent the financial performance and position of the entity.
Material misstatement is based on our determination of materiality, and for a £100m turnover business this could be deemed to be an error of £1m!
For many business owners an audit is often seen as a chore and an unnecessary expense.
Firstly, however, it is a legal requirement for many companies.
For financial years that begin on or after 1 January 2016
A company will require an audit if it exceeds at least two of the following:
- an annual turnover of no more than £10.2 million
- assets worth no more than £5.1 million
- 50 or fewer employees on average
The rules for charities are different.
For charities an audit will be needed if total assets (before liabilities) exceed £3.26 million and turnover exceeds £250,000, or if the charity’s gross income is more than £1m.
So in general small companies do not require an audit unless they want one.
Secondly, you could be positive and view it as a great opportunity to get under the bonnet of a business and have a look at its internal systems and identify weaknesses and opportunities. This is where the business acumen of the audit team comes in.
We have a highly experienced team who are able to highlight areas of opportunity and areas where potential problems could arise. We will work with you not only to focus on the areas which we need to fulfil our duties, but also to look at those areas of interest to you to help you develop the future strategy and direction of your business. The department is led by Mark Friend who is a highly experienced registered auditor, but more importantly someone who has himself built a successful businesses.
As part of the audit we will provide you with a management letter covering key issues that have come to our attention during the course of our work. The report will include not only the basics, such as information regarding the audit approach and scope, any adjustments to the figures that have been identified during the audit, details of financial risks that have been highlighted and any expected modifications to the audit opinion, but also risks and opportunities that are discovered.
If you need an audit then please contact Mark Friend using the contact details or simply fill out our next steps form or arrange a discovery meeting.