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The firm is
registered as auditors by the Association of Chartered Certified
Accountants (For details
of the
Association of Chartered Certified Accountants click here) (For details
of when accounts must be audited and when they are exempt click
here ) This means we
are qualified to conduct statutory audits under the Companies Acts, and
various other Acts of Parliament. We are also
authorized to prepare various reports and certificates that can only be
prepared by a registered auditor, such as reports under the Solicitors’
Accounts Rules . |
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Audit work
is quite distinct from accountancy work. Accountancy work involves preparing accounts from the books and
records of an entity. Audit work, on the other hand, is an examination on a
test basis of accounts that have already been prepared, the accounting
records, and the supporting evidence , in a structured way. Its purpose is to
ensure that the directors of an entity have kept proper accounting records,
and have properly prepared accounts from them, and that the accounts show a
true and fair view of the operations of the entity. Although not its primary
purpose, audit work may also highlight
errors or fraud that may have occurred. The conduct
of audit work is highly regulated and policed by the ACCA on behalf of the
Department of Trade and Industry, and audit work must be carried out strictly
in accordance with Auditing Standards. The ACCA actively monitor the
registered auditors they regulate, and we can expect regular visits from them
to examine our files and procedures , to ensure that our work is carried out
as it should be. |
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Taking audit
instructions Before the
firm takes audit instructions, we are obliged, under auditing standards, to
satisfy ourselves as to the bona fides of the entity to be audited ,and be
satisfied that all the persons in our firm are sufficiently independent of
the entity for us to be able to form an objective opinion on the entity. We
also need to be sure that we have the resources and sufficient understanding
of the business of the entity to enable us to form a proper audit opinion. As a first
step, if you would like us to consider undertaking audit work, then contact
us for preliminary discussions |
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The rules as
to whether a company or a charity is subject to an audit, or is exempt from
an audit or has some kind of special report are in principle quite simple,
but are often complicated by special circumstances. The rules are often
subject to change, so specific advice should be sought. For limited
companies that are not charities. If the
turnover of the company is less than £1 million per annum , and the assets in
the Balance Sheet are less than £1.4 million, and the company is not a member
of a group of companies, and it is also a ‘small’ company as
defined by the Act, then normally the company is exempt from audit. If the
company is a member of a group then more complicated calculations must be
made. For
charities The turnover
figure is reduced to £250,000 per annum, and the asset in the Balance Sheet
are less than £1.4 million. If a company is a charity and its turnover is
between £90,000 and £250,000 then, although it is exempt from audit, it is
required to have a special report, known as an accountant’s report, which
can only be prepared by a registered auditor. There are also different rules
for charities which are members of a group. The above
exemptions do not apply if shareholders, or in the case of charities, donors
of money, have required an audit to take place. This must be done according
to a precise procedure. Note : All
of the above information covers most situations, but there are situations
where the above figures do not apply. Before relying upon an exemption,
professional advice should be taken. |
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