Audit Services

What is an Audit?

The objective of an audit is to achieve a detailed understanding of the accounting systems and systems of control of the business. To carry out an effective audit requires a detailed understanding of the company’s business. This forensic in-depth knowledge of the most intricate detail of the business is like having the engine of your car stripped down and then a complete oil change, because an audit tends to reveal the strengths and weaknesses of a business as well as uncovering any anomalies. This insight forms the basis of specific business advice and produces a very detailed report.

Is an audit disruptive?

An audit can be somewhat disruptive to businesses, but the disruption’s temporary, and we do everything we can to minimize it. DNS will most probably work on site in your offices and will need access to all statutory books and accounts, all paperwork as necessary such as client files, as well as access to systems, such as CRM and accounting software, and on certain occasions, access to personnel working in the company. Weighing it up, the slight disruption is well worth it: an audit is like a detox! It cleans out the deadwood and allows the business to see objectively, reset, and grow.

Why do businesses need our audit services?

There are statutory and non-statutory audits, but whichever is required, an audit is designed to review the accounting systems and systems of control of a business, and to report on these, as well as making recommendations and improvements.

There are good reasons for businesses to carry out non-statutory audits, these include:

• To reduce fraud and to deter would-be fraudsters
• Detect opportunities for growth, i.e. by culling overheads
• Ready a business for a merger or acquisition by taking an accurate “rain check”; i.e. to put the business up for sale or to launch it on the stock market
• As a compliment to the accounts, to attract or seal finance or a loan from a bank or commercial lender or investor
• To compliment credit references for suppliers; to inform HMRC.

A history of the accounts alongside audit reports re-sets the business. An annual statutory audit is required for:

• Public limited companies, the banking, insurance and finance industry, solicitors, charities, friendly societies, etc. (and also subsidiaries of these)
• If the professional or trade organization you belong to stipulates you must have your accounts audited
• If shareholders do not agree to opt out (see below) of an audit.

Since the change in legislation (June 2016), the new “small company” or “small business” qualification now stands. This means that for accounting periods starting on or after 1 January 2016 there are new audit thresholds so that “small businesses” (including LLPs) are exempt from statutory audits providing two of the three following conditions are met:

• Turnover below £10.2 million
• Balance sheet total below £5.1 million
• Less than 50 employees

For accounting periods starting before 1 January 2016 and ending on or after 1 October 2012 “small businesses” (including LLPs) are exempt from statutory audits providing two of the three following conditions are met:

• Turnover below £6.5 million
• Balance sheet total below £3.26 million
• Less than 50 employees

Also note that most subsidiary companies will be exempt from a statutory audit providing their parent company guarantees their liabilities.

For accounting periods ending on or before 30 September 2012, an audit is required:

• If turnover exceeded £6.5 million
• If gross assets exceed £3.26 million; or
• If the company is part of a group that exceeds those limits.

Please Contact us to discuss the benefits of non-statutory audits or to clarify whether your business requires a statutory audit.