As we are Registered Auditors, we are able to carry out all statutory, mandatory and other audits.
The Companies Act may require your company or LLP to undergo an independent audit on its accounts, for instance if your turnover, assets and/or number of employees are above certain thresholds. Read on to find out more about the requirements of the Act. Find out more about our services to limited companies and LLPs.
companies act changes
In recent years the Companies Act has revised audit requirements for UK companies and LLPs and has introduced several exemptions which are largely governed by the size and activities of the business.
This reflects a recognition that, for most smaller companies and LLPs, the directors/designated members and the shareholders/members are one and the same people. The changes have been made to avoid those situations where a director/member prepares the financial statements and requires them to be audited before presenting them to him or herself – clearly an unnecessary and added expense for small businesses, without obvious benefit.
audit report
The work that an auditor undertakes on a company’s or LLP’s financial statements will be summarised in their report which accompanies the accounts which are presented to shareholders/members. The audit report will contain several distinct sections including one that states the name of the company/LLP or group which has been audited and the accounting standards which have been used as the basis for their assessment. They will then go on to provide a synopsis of the scope of their work and thus seek to provide the reader with a clear understanding of what was within the scope of their work.
The audit report will then present a conclusion of whether or not the company/LLP has met its statutory obligations as defined in the Companies Act and whether the accounts show a “true and fair” view of the actual activities engaged in during the period under consideration.
A further section within the audit report would highlight any significant discrepancies between the auditor’s and directors’/members’ view of the accounts and would details such differences for the reader to make an informed assessment.
appointment of an auditor
In cases where an audit is required either by law or requested by holders of at least one tenth of any class of shareholding, it is normal for the company directors/designated members to evaluate and select the initial appointment. That appointment must be ratified by the members but in subsequent years the appointment continues until such time as the auditors resign or their appointment is terminated by the company directors/designated members and an alternative auditor appointed.
Restrictions apply which prevent persons “connected” with a particular company/LLP from becoming its auditor. Those who would fall in to this category would include employees of the company/LLP (or another associated with it) and their partners. These provisions exist to ensure that a high level of independence exists between the company and the persons reporting on it.
In addition, in order to ensure that the person auditing a company/LLP possesses the requisite skills, experience and judgement they must be a suitably qualified person and a member of one of the recognised professional accountancy bodies.
The audit will deliver independent evidence of the integrity of your accounts, providing reassurance to your customers, suppliers, actual or potential investors, banks and other finance providers. McBrides’ experienced team will discuss the requirements with you in advance, and tailor our approach to minimise disruption to the business.
We will report our findings to you and let you know where we believe improvements can be made in your systems and procedures.