What is an audit?It's an examination of the books and records of a business, usually a limited liability entity, by an independent 'auditor', the objective of which is to assess the accuracy or otherwise of the underlying records, and ultimately to form an opinion about the financial statements prepared from those records.
Why have an audit?An audit serves two basic purposes, the first of which is to provide the shareholders with the assurances that the business is being conducted in such a manner so as to safeguard their assets. The second basic purpose is to provide 'reliable information' to third parties to enable them to establish a financial view about that business (which includes charities, etc).
To many business managers the preparation of annual financial statements and the audit is unfortunately often perceived as a necessary evil. However the audit process with Burns Waring is based upon the concept of adding value to your business. Our clients have come to appreciate that the audit is the perfect opportunity in which to identify areas that may lead to improvements in efficiency and profitability. Our skilled and impartial teams take an objective view of a business, fulfilling both the statutory requirements and providing constructive ideas and advice.
Who needs an Audit?
- Incorporated Businesses where, under current regulations, turnover excluding VAT exceeds £6.5million, or net assets exceed £3.26million, are required by law (the Companies Acts) to be subjected to an annual statutory audit. These limits can change, and indeed have changed several times recently. Companies with turnover below the 'statutory limit' may, and do, appoint auditors for various other reasons (see below).
- Regulated Businesses, such as Charities and 'friendly societies', solicitors, financial services, estate agents, etc usually require a 'special audit' specific to their industry These businesses are highly regulated with strict procedures and reporting requirements and an in-depth knowledge and technical expertise is vital. Burns Waring has the skills and experience required.
- Lenders, such as banks, may stipulate an annual non-statutory audit in the terms of an agreement to safeguard as far as possible their 'investment' in the business.
Who can do my audit?An auditor needs to be qualified and 'registered' with one of the recognised bodies who control and monitor their members' ability to undertake audit work. The main bodies regulating auditors (for corporate and charitable audits) in the UK include the Institute of Chartered Accountants in England and Wales, and the Association of Chartered Certified Accountants.
We are registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales.