By Andrew Clarke, Senior Accountant and Auditor, d&t
The Pandemic has changed the accountancy auditing landscape. Normally mid-sized firms are legally required to provide an annual audit of their financial statements. 2020 has seen so many new elements where accounting practices have the potential for errors or more deliberate falsifications, from the introduction of the ‘widely abused’ furlough scheme, to loans and other financial support for businesses, plus an increase in cyber security issues where staff have been working from home, so due diligence from everyone involved has never been so important.
As accountants working in the Swindon area, we are also seeing bona fide situations where commercial landlords want reassurance that their retail clients have a stable business and can still afford to pay the rent. Similarly, suppliers are increasingly needing to ensure they will be paid for any work completed. Third party lenders such as asset finance companies need to know their loans can be repaid.
An audit checks the financial statements of an organisation to confirm they are true and fair, and not materially misstated, and can provide reassurance in these cases.
Usually, mid-sized companies which exceed two out of three criteria, for two consecutive years are legally required to have an audit. The criteria for legally required audits are: an annual turnover of more than £10.2 Million, gross assets of more than £5.1 Million, and an average workforce of 50 people or more.
There could also be a situation whereby small companies that are part of a non-small group may be legally required to have an audit too.
However, voluntary audits for firms not meeting the criteria are an option. In the future, will we see more organisations voluntarily using audits to identify any accounting anomalies? Perhaps to uncover a suspected cyber fraud trail or simply to identify mistakes that have been made claiming financial support where the company was not eligible, before any legal action is taken?
If your organisation legally requires an annual audit or is considering a voluntary audit, to reassure third party suppliers for example, it is important to use an organisation experienced in your sector.
At d&t we have 20 years’ auditing experience in the construction sector and ten years in retail, plus extensive experience in healthcare industries. We are based in Swindon, and during the Pandemic we have provided both remote audit work and on-site visit audit work, for our audit clients.
Auditors will need to be even more thorough moving forwards due to the numerous challenges the COVID crisis has introduced to businesses. Selecting the right auditor for your firm will ensure your financial statements are checked thoroughly and that they are true and fair, and demonstrate transparency for any third party whch may have an interest in the organisation, who will benefit from the reliance from an audit opinion.
For further information please visit: www.team-dt.com