As a result, I think back to when I was a young, impressionable graduate being told the world was my oyster yet continuously attending interviews looking to just catch a break. There was one interview that really stuck with me, their feedback was that I did not truly understand what an audit was. Ironic now coming up to my 10th year in the industry!
So here it is, put simply, what is a financial audit?
The definition you will find through the much-loved go to friend and internet search engine, is that it’s a type of audit mandated by the law or a statute to make sure that the book of accounts are true and fair, which is presented to the public and regulators. If the business meets certain criteria, then the statutory audit is mandatory.
So, what does this mean?
Here at UHY, we provide audit services for charities and other NFPs, academies, publicly listed and private limited companies. For the purpose of this blog, we are focusing on audits for private limited companies, which essentially means us providing an opinion on the company's financial statements. From carrying out various testing and analytical procedures, a clean opinion confirms that we have found no reason to believe the numbers included are not reasonable and are a fair representation of how the financial year went. We tailor our testing using a calculated level of materiality along with a thorough understanding of the business.
For private limited companies of a certain size, where two of the three criteria below are met, it is compulsory this work is carried out:
- Turnover of more than £10.2million
- Assets worth more than £5.1million
- 50 or more employees.
Those under these thresholds are considered audit exempt. Clients can however opt for a voluntary audit because not only do we highlight recommendations for where internal controls can be improved, but to include an audit report also gives the financial statements added merit, as in the end these statements are filed within the public domain. This has become more relevant as our clients navigate a period of continued uncertainty. We therefore work closely with our clients, building strong relationships to deliver what we hope is a seamless service. After all, you need to look back to be able to improve driving forward.
The next step
For more information, please contact Eleanor Driver, on email@example.com, or your usual UHY adviser.