To contact us and ask for our services click here
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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 £6.5 million per annum, and the assets
in the Balance Sheet are less than £3.26 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, provided not more
than 10% of the shareholders have required an audit according to precise
procedures.. If the company is a member of a group then more complicated
calculations must be made. For
charities The gross
income exemption figure is £500,000 per annum, and the assets in the Balance
Sheet must not be more than £3.26 million. If a charity has gross income of
less than £250,000 per annum, then it can claim exemption from audit even if
its assets exceed £3.26 million. All charities with gross income is between £25,000
and £500,000 are required to have a special report, known as an independent
examination. There are also different rules for charities which are members
of a group. Note that with a charity ‘gross income’ is not always the same as
turnover, and has a legal definition The law in
Scotland is different and different rules apply. The above
exemptions do not apply if donors of money, or the charities internal rules require
an audit to take place. Note : 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. |
Peter Brown & Co is a
trading name of Undershot Ltd, registered in England , no 4114468. Director
:- P.Brown FCCA, FCIE,DchA,BSc.The
registered office is Acomb Grange, Grange Lane, York, YO23 3QZ.
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