There is always much scrutiny in the industry and in the press about the ethics of auditors especially when big cases hit the press such as Enron or Tesco. One of the largest threats to a firm like Kelsall Steele is independence, being able to separate the work surrounding year end accounts, management accounts, budget preparation and the one off year end exercise of the statutory audit.
An audit must be carried out without the non-audit work affecting the opinion to be given on the audit report. We always flag to our clients this potential issue and we talk about how we introduce safeguards to negate the threat of our independence. We often have separate staff preparing the accounts to those carrying out the audit work and we make no decisions for the client. Every posting to the bookkeeping software, every adjustment to the accounts, all accounting estimates are decided, agreed and implemented by our clients.
We therefore sidestep the self review threat which goes hand in hand with this issue as the client is making his/her own adjustments to their accounting systems. We are able to provide the background to decision making, such as implementation of FRS102 but the end game of writing down goodwill, for example, or valuing freehold properties lies with the client as they are the most knowledgeable people in their own businesses and are best placed to make the ultimate decisions.
If you would like to discuss your audit requirements with us, please give us a call.
We are pleased to announce that our Corporate manager Richard Lenihan has been appointed as a “Responsible Individual” by the Institute of Chartered Accountants England and Wales. This appointment follows Richard’s extensive audit experience gained over a number of years working on small to medium companies and groups, charities, solicitors and both academy and independent schools.
This appointment will complement Richard’s Corporate Manager role within the firm and his specialism in audit, it will also allow him to act as support for the other Responsible Individuals in the firm, Bernard Pooley and Clare Vaughan, in signing off audit reports.
With the increasing trend in recent years to move small companies away from the regulatory need to undergo a statutory audit, it is still worthwhile considering the benefits an audit can bring to an organisation.
- An audit can assist in identifying weaknesses in both the company’s accounting and control functions.
- The process will necessitate close working between the client and the auditors, leading to the auditors having a better understanding of the business and greater ability therefore to provide business recommendations and advice.
- Audited financial statements will enhance the credibility of the figures provided to the bank, lenders or grant funders for example.
Audit Director, Clare Vaughan, said of the Kelsall Steele process “We no longer view an audit as a ticking exercise but as a real chance to understand our clients’ businesses and hopefully assist them in tightening their accounting function, their financial control procedures and highlighting any areas of improvement. By working on site at our clients’ premises, we also feel we can gain a greater understanding of what is important to the Directors in running their companies.”
If you’d like to find out more about Kelsall Steele’s audit process and how it could be of benefit, you can contact Clare Vaughan on 01872 271655 or email firstname.lastname@example.org