Audit & Assurance
At Mitchell Charlesworth we recognise the added value an audit can bring to our clients. We are also aware that assurance services may not primarily be considered as a service that “adds value”. However, an audit, whilst a legal requirement in some circumstances, can bring with it added trust and confidence in the entity, and its financial statements. It can also add other intangible benefits including deterring fraud and providing comfort to external stakeholders such as customers and suppliers, and in the case of some charitable entities, the trust and confidence of the public.
Mitchell Charlesworth have a good understanding of combining our clients’ audit requirements and ensuring that this compliance assignment is a useful business tool. Our audit offering is continually assessed to ensure it delivers an efficient and expert service to our clients.
Our Practice Audit Coordinator ensures that all staff involved in audit are fully trained and aware of their responsibilities, and hold regular internal briefing sessions to ensure the entire team are fully versed with changing standards and efficient testing procedures.
The audit sector has become more specialised. In order to add to the team’s efficiencies our practice audit team now use paperless auditing software, ensuring that our audit work is risk focused, and to make the audit process as smooth as possible for our clients. Furthermore, our audit teams are structured in such a way that you can be assured that we are dynamic enough to best service you, whilst remaining alert for innovative methods to service you better.
Does my company have to have an audit?
Compliance with regulation is only one reason to have an audit. Many exempt organisations will voluntarily seek an audit to add an extra layer of confidence in their financial statements. You may also consider having an audit if you are planning to sell your business, to help achieve the maximum sale price. We can also provide specialist advice on preparing your business for sale.
What are the criteria that triggers a company audit requirement?
The majority of standard private limited companies (i.e. those having their own legal entity) are subject to an external audit if they meet any two of the following criteria:
- Their turnover is more than £10.2 million
- They have assets totalling in excess of £5.1 million
- They employ more than 50 people
Some companies that are not legally required to be audited choose to undergo the process for reassurance that their accounts are accurate and their financial reporting is in accordance with Companies House regulations. It may also be the case that key stakeholders require the company to complete an audit to satisfy their own internal criteria.
What are the benefits of having a company audit?
An audit can bring many elements of added value such as:
- Identifying weaknesses in internal controls
- Identifying where profitable changes can be made
- Lends credibility to financial statements
- Educates business owners
- Increases stakeholder confidence.
Identifying weaknesses in internal controls is part of the overall audit process. Our audit testing is specifically designed to identify any significant deficiencies which can increase the possibility of a material misrepresentation of the financial information by a business. Our process is not to just verify the financial information, but also to ensure that the processes used to report and compile the financial information is sufficiently robust to reduce the chance of misreporting or fraud. The usual approach can also aid an entity become more efficient if there are inefficiencies throughout their processes.
An externally verified set of financial statements are usually considered more reliable in the market place than those that have not been. Stakeholders such as lenders, potential clients and suppliers will find your organisation a much more attractive proposition when presented with an externally verified set of financial statements, free from material error or fraud!
As well as conducting our audit verification work, an audit allows our team to really understand your business and how it operates within its chosen market or sector. Our collective knowledge and expertise in different sectors can help educate business owners. We often work closely with business owners to improve not only the overall accounting process, but other processes throughout the business, ensuring that you in turn are providing an efficient service provision to your own customers. We will provide current tax and accounting standards advice whilst creating a personal relationship with you to help grow your business and ensure you have the correct advice on a timely basis.
The Audit Process – The MC Way
Mitchell Charlesworth is a partner led firm. Most of our audit partners have a general portfolio with a concentration in one or two areas of expertise. Sectors of expertise include:
Mitchell Charlesworth understands that Audit and Assurance is a complex area of our business and therefore we have ensured that we have a team of individuals who are capable of completing these tasks in the most efficient way - our audit team consists of an engagement partner, assignment manager and audit senior. Assistants may also be used for audit testing purposes.
We focus on our four key stages of audit:
Planning and identifying the audit approach
The engagement partner will meet with you to discuss your individual business and to ensure they understand the company’s industry, regulators, accounting policies, business risks, objectives and strategies prior to commencing the audit process. As part of the audit planning process the audit team will meet to discuss the approach of the audit and the individual responsibilities for each member of the team.
Documenting and testing the companies internal controls
The fieldwork will ensure that there is consistency between financial and non-financial information by sample testing documents in all material areas.
Verifying and testing the financial statements to ensure they are compliant and the numbers add up
The fieldwork, via analytical review procedures, will ensure that there is consistency between financial years and constant training ensures that any changes in regulations and accounting standards are identified from year to year.
Producing an auditor’s report
All aspects of our findings will be discussed on site with you and a final report to outline our findings will be produced for your retention.
We will then complete our audit report to include our opinion as to whether the company’s financial statements are accurate and fairly presented, along with our audit findings and recommendations, both qualitative and quantative.
Our engagement partners lead each audit assignment but are also supported by a dedicated audit partner who has overall responsibility for maintaining quality and standards. They complete warm and cold file reviews throughout the year, and our audit and tax team members remain available to you to provide support on any ad hoc queries.
As a result of the audit, a range of other assurance services can be provided and tailored to your needs, such as:
- Accountants’ compilation reports
- Limited reviews
- Agreed upon procedures
- Assurance on non-financial information, including sustainability reports.
Why would I want to switch my auditor?
There are many reasons why you may want to switch auditors:
It can be difficult to make the break, especially if you have developed a strong relationship with your auditor over the years. This in itself can be a reason to make the change – a new firm can inject fresh energy into a company and improve the robustness of the audit. Risk areas are reassessed, and different questions are asked of the management team, as the new advisors get to grips with your company.
Growth may also be a deciding factor. What worked for you as a young company may not be the right fit for you now. You may now need an auditor with more industry experience, for example.
Range of services
Assessing the balance between non-audit and audit services should be high priority if considering making the leap. Mitchell Charlesworth are a ‘one stop shop’ when it comes to audit, tax and advisory services.
Since the introduction of the EU Audit Reform on 17 June 2016, credit institutions, public interest entities, and larger companies may be required to re-tender for audit every 10 years, and change auditor at least every 20 years. Please contact us for further information regarding this requirement.
We understand that the prospect of choosing a new advisor can be daunting, but remember - a fresh pair of eyes could bring a new impetus to your business.
The work of the audit team is reviewed at all stages, initially by the manager and secondly by the partner responsible for the work, to ensure robustness of the audit, and that it addresses the risks and issues identified during the planning process. The partner and manager are actively involved throughout the audit process and generally throughout the year. We positively encourage contact with our clients so that we can advise on matters as they arise and not just as part of a year end process, by which time, may be too late to rectify any issues. Quality is at the core of what we do.
The audit of the auditors!
Additionally we are subject to periodic reviews by the Quality Assurance Directorate of the Institute of Chartered Accountants; we are also subject to reviews by fellow members of the Kreston International network, and we have an annual Audit Compliance Review by external consultants to ensure that the quality of the work we perform is of a sufficiently high standard.
If you would like to meet to discuss our audit methodology in more detail, please get in touch.
Meet the team