External auditors are in the spotlight at the moment following KPMG’s role in signing off the accounts of Carillion, which collapsed under the weight of debts amounting to £1.5 billion.
While KPMG has questions of its own to answer, it’s not just stricken construction conglomerates that require audit services to prove their accounts are in good health.
If your business turns over more than £10.2 million, has assets worth less than £5.1 million or you employ more than 50 members of staff, it will require an audit.
Even if your business meets 2 of these conditions it will require an audit, which is defined as the process of submitting your annual accounts for official inspection by an independent body.
But what do you need to look for when it comes to picking an auditor?
Here are 5 things to consider.
There’s no substitute for experience in any walk of life, and the same is true when it comes to selecting your auditor.
Choosing a diligent auditor with a wealth of experience in dealing with the audit process and accounting standards should be your No.1 consideration.
A good auditor will gain an in-depth understanding of your business by reviewing your financial and management systems.
The goal here is to identify any weaknesses in your business’ processes, with the aim of improving operational efficiency going forward.
External auditors are interested in internal controls that directly impact on financial information.
While it is important to identify your own audit contact for the auditor to liaise with, you should look for an objective, communicative auditor who isn’t afraid to deliver challenging messages.
Your business needs to collaborate with the auditor to ensure they receive the right information to analyse and come to an accurate conclusion.
This should be an employee who knows certain processes inside out. It’s their knowledge that will help the auditors evaluate your business and its procedures.
Your auditor should sit down with you and offer detailed recommendations once the audit has been completed and the report delivered.
Our team of experts offer a full Statutory Audit service, which starts with an initial consultation to see if your company is exempt from the process.