An audit, or not an audit? That is the question

Do I need an audit?

Do you know when you are required to have an audit? You may have heard of some recent changes in the audit requirements and are still confused or none the wiser. Well let us clear this one up for you;

Under the Companies Act 2006 two out of three of the following have to apply**:

Turnover > £6.5m
Balance sheet total * > £3.26m
Average number of employees > 50

*fixed assets + current assets

** excludes: any specific requirements for an audit required by a company’s Articles of Association; rules that apply to subsidiary undertakings

What are the benefits of having an audit?

To many business owners an external audit may appear a costly and unnecessary professional service. Before automatically reaching this conclusion you should consider the many benefits of having an audit. We have listed our top three:

  1. Enhances credibility of financial statements
  • Credit ratings can be affected by not having an audit
  • Lenders, suppliers and customers often make their decision on whether or not to engage with an entity based on whether or not audited accounts are available
  • Audited accounts provide added assurance that the accounts are free from material error
  1. Pro-active advice may add real value and benefit to the business
  • An audit reviews the internal control and accounting framework thus enabling industry knowledge based suggestions for improved business performance to be made
  • Risk based auditing approach supports the business’ risk management procedures and reduces the likelihood of misappropriation or fraud
  1. Peace of mind
  • For those directors and/or business owners not involved on a daily basis an audit provides the reassurance that the business is operating as communicated to them by management
  • An audit reports to those charged with governance whether the control and accounting framework is operating as designed and provides details of any weaknesses and suggestions for improvements
  • A robust audit has been undertaken that provides independent, professional assurance which challenges and supports the business with emerging risks

Our approach to audit

We design our audits to focus on the risks that may have a material impact on the financial statements. It is a critical function of our approach that we get to know and understand your business. You are involved in our audit from the start to the finish. We report our findings in a practical and commercial way that makes sense and addresses any issues arising.

The key to carrying out any audit is preparation and planning in advance. We guide you through this process so the amount of work required is kept to a minimum and the audit experience produces the maximum benefit.

Want to know more?

Should you be looking to put your audit out to tender or wish to understand more about our service and why we are different, please contact Andrew Kennon from our Fairview House office in Carlisle.

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Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

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Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW