Audit

Our Audit Guide

In the UK, not all companies are required to undergo a statutory audit. The necessity for an audit is determined by specific thresholds set by the government. As of the latest regulations (October 1st 2024), a company is exempt from mandatory audit if it meets at least two of the following criteria:

• Annual turnover does not exceed £15 million.

• The balance sheet total does not exceed £7.5 million.

• The company has no more than 50 employees.

However, even if a company meets these criteria, there are exceptions where an audit may still be required. For instance, publicly traded companies, financial services firms, and certain regulated industries must conduct audits regardless of size. Additionally, stakeholders such as shareholders holding at least 10% of the company’s shares can request an audit.

Understanding these thresholds helps businesses determine their auditing obligations and ensures compliance with statutory requirements.

Why Carry Out An Audit

Auditing is key to the financial health of a business. Corporate governance, particularly the UK Corporate Governance Code, is important in audits as it ensures the consistency of directors’ statements on going concern and longer term viability with the financial statements. It’s more than just compliance, it’s about risk management, internal controls and strategic planning.

Purpose

The main purpose of an audit is to provide an independent view of the financial statements. Auditors check the financial records to make sure they are accurate and a true reflection of the business. This outside perspective is crucial for stakeholders who need to make decisions based on these numbers.

Also audits help identify weaknesses in internal controls. By reviewing financial processes auditors can find inefficiencies or potential areas of fraud. This proactive approach allows businesses to improve their operations and reduce risk.

Another purpose is compliance. Audits ensure the business is compliant with regulatory requirements. This avoids legal penalties and improves the organisations reputation.

Finally audits promote transparency. They provide a clear and unbiased view of a company’s financial health, build trust with investors, customers and employees. A well done audit reassures these parties of the business’s integrity and stability.

External vs Internal Audits

Understanding the difference between an external auditor and internal audits helps businesses get the most out of both. Each type of audit has a different purpose and understanding these differences

External Audits

External audits provide an independent view of a company’s financial statements. External auditors who are not employees of the company perform these audits to ensure accuracy and compliance with regulations. Their independence from the company being audited is key as it allows them to produce an unbiased report that’s required by investors and regulatory bodies. They check that the financial statements show a true and fair view of the business’s financial health.

External auditors follow established audit standards such as International Standards on Auditing (ISA). They look at financial reporting, revenue, expenses and asset management. When they find discrepancies they report them and recommend solutions to fix the issues.

Regulatory compliance is the reason for external audits. Many companies need an annual external audit to comply with statutory requirements. These audits also promote transparency and build trust with stakeholders such as investors and customers.

Internal Audits

Internal audits are performed by internal auditors who are employees of the company. Unlike external audits internal audits focus on improving internal controls, risk management and governance processes. Internal auditors review operational activities to find inefficiencies, risks and areas for improvement.

Internal auditors check compliance with internal policies and procedures. They help management improve processes like financial reporting and fraud prevention. Internal audits are often continuous so businesses can have an ongoing view of their operations.

An internal audit can also help with strategic planning. By identifying risks and recommending improvements internal auditors support long term business goals. This type of audit adds value internally and contributes to the business’s success.

Our Audit Services

We offer a full range of audit services to meet the specific needs of each client. Each service will improve financial integrity, risk management and governance within your organisation.

Financial Statement Audits

Our financial statement audits ensure the financial reports are accurate and reliable. Reasonable assurance is provided in these audits meaning while there is a high level of confidence that there are no material misstatements, it does not mean all misstatements will be detected. We review every aspect of your financial transactions to help you comply with regulatory requirements and build stakeholder trust. Our auditors check that your financial statements show a true and fair view of your business’s financial position.

Internal Audits

Internal audits which we do within your organisation focus on improving internal controls, risk management and governance processes. By finding operational inefficiencies and providing strategic recommendations internal audits support your long term business goals. These audits are key to overall business performance and alignment to strategic objectives.

Compliance Audits

Compliance audits ensure your organisation is complying with relevant laws, regulations and internal policies. Government agencies require performance audits to evaluate their efficiency and effectiveness in resource management. We help you assess your compliance level and identify the gaps. Regular compliance audits reduce the risk of legal issues and penalties and ensures your operations are running within the legal framework.

Operational Audits

Operational audits review your business processes and procedures to find areas for improvement. Management accountants are key to these audits by ensuring financial statements are accurate and reliable, cost accounting principles are followed and regulatory requirements are met. We review your operational activities to improve efficiency and effectiveness. This service will streamline processes, find cost savings and boost productivity.

IT Audits

IT audits review the effectiveness and security of your information systems. We review your IT infrastructure, data management and security protocols to ensure they meet industry standards and best practices. IT audits will protect your data, reduce cyber risks and increase your organisation’s technical resilience.

Special Audits

Special audits address specific issues or concerns within your organisation. Whether you need an investigation into suspected fraud or a deep dive into a particular department we have a solution for you. Special audits provide targeted insights and practical recommendations to address key areas of concern.

Including these audit services in your business strategy will increase transparency, financial integrity and support long term growth. Our audit expertise means your organisation will be compliant, efficient and ready for what’s next.

Benefits of Our Audit Services

Our audit services offer many benefits from financial reporting accuracy to stakeholder trust and compliance.

Financial Reporting Accuracy and Financial Reporting

Accurate financial reporting is essential for any business. Publicly traded companies need to comply with regulatory requirements and auditing standards set by the PCAOB and evaluate their internal controls under the Sarbanes-Oxley Act. Regular audits ensure financial statements show the true financial position. Our auditors review your financial records, verify transactions and test internal controls. This will find discrepancies, errors and potential fraud. More transparency means better decision making.

For example if we find discrepancies during a financial statement audit we recommend corrective actions. Businesses then implement these recommendations to improve their records. This accuracy is critical when seeking funding or loans as lenders and investors require reliable financial information.

Our auditors also help organisations comply with Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). This reduces regulatory risk and increases credibility. Regular auditing means financial records are accurate and compliant.

Stakeholder Trust

Stakeholder trust is key to long term success. Audit services help build that trust by providing assurance that financial statements are accurate and transparent. When we review a company’s financial health stakeholders – shareholders, investors and customers – will have confidence in the business.

For example an external audit report with a clean audit opinion will give stakeholders confidence that the financial statements are free of material misstatements. This trust means increased investor confidence and customer loyalty. Transparent financial reporting also means a better corporate reputation and better relationships with suppliers and partners.

And regular audits show a company is accountable and transparent – key requirements in today’s regulatory landscape. By having periodic independent audits companies show they put stakeholder interests first and strengthen their market position and build trust.

Risk Reduction, Compliance and Corporate Governance

Audit services are critical to risk management and compliance. They help identify and mitigate risks to the business. By reviewing internal controls auditors will find weaknesses that could lead to fraud, financial loss or regulatory breaches.

For example during an internal audit auditors will review the risk management processes. They will find gaps, recommend improvements and monitor implementation. This proactive approach reduces the likelihood of financial irregularities and improves operational efficiency.

We also comply with various laws and regulations. Regular compliance audits will ensure organisations comply with the law and avoid fines and reputational damage. And audits will keep businesses ready for regulatory changes so they remain compliant.

Comprehensive risk management and compliance through auditing will not only protect your assets but also builds a solid foundation for long term growth. So you can operate with confidence knowing you are protected against risks and regulatory consequences.