Do you know why you need an audit or why you should have one?
The main reasons why you will be required by law to have a statutory audit are...
- You are a PLC or a banking, insurance or finance company (or a subsidiary of one of these)
- You are required by your professional or trade organisation to have your accounts audited
- Your shareholders do not agree to opting out of the audit
For accounting periods starting on or after 1 January 2016 audit thresholds are aligned with the new qualification as a small company, meaning companies (including LLP's) are exempt from having a statutory audit if they meet 2 of the 3 following conditions...
- 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 company, meaning companies (including LLP's) are exempt from having a statutory audit if they meet 2 of the 3 following conditions...
- Turnover below £6.5 million
- Balance sheet total below £3.26 million
- Less than 50 employees
Most subsidiary companies are also exempt from audit where their parent company guarantees their liabilities.
For accounting periods ending on or before 30 September 2012 an audit is required where your turnover exceeds £6.5 million or your gross assets exceed £3.26 million or the company is part of a group that exceeds those limits.
We can advise you if you need an audit and if not, you can save on accountancy fees!
However, we aim to deliver hassle-free audits and there are good reasons for having an audit even if you are not required by law to have one...
- An audit involves a detailed review of the company's accounting systems and systems of control and also requires a detailed understanding of the company's business. Such a review and knowledge can provide increased opportunities to provide proactive business advice on many matters
- An unqualified audit report can improve the status of the accounts in the eyes of banks and commercial lenders, the Taxman and suppliers who may be seeking credit references, etc
- A history of accounts with clean audit reports can also be a factor if you ever wish to sell the company or, perhaps, take it to the market
- The possibility of fraud can be reduced and an audit can act as a deterrent to any potential fraudster
In addition to statutory audits for limited companies we can also provide the following specialist audit services:-
- charity audits;
- grant claim audits;
- solicitors accounts rules audits; and
- internal audits.
Charity audit services
Lanham and Company have been committed to the charity and not for profit sector for over 25 years and was founded with an initial client base of charities and Registered Social Landlords requiring audit and accountancy services and one of the local building societies which required an internal audit service. The practice has continued to focus heavily on the charity sector ever since with Andrew Ireland FCCA heading this team.
We provide a comprehensive compliance and support services for this specialist client base covering accounts production, independent examinations, statutory audits and grant funding work. We are also able to advise trustees and management regarding such matters as internal controls, the Charities Act 2016 and risk management.
Solicitors and the Solicitors Accounts Rules
Since the early 1930’s the holding of client money has been covered by rules through various laws and regulations, the most recent update being the SRA Accounts Rules 2011, issued by the Solicitors Regulation Authority Board which came into effect in October 2011 replacing the 1998 Rules. These rules fulfil the requirements of the solicitors Act 1974, the Administration of Justice Act 1985 and the Legal Services Act 2007.
The purpose of the legislation is to protect clients’ money held with specific requirements on how a solicitor must comply with the management of such money, its receipt, use and how it is recorded and accounted for. Solicitors that hold client money are required, within six months of their accounting year to file, with the Solicitors Regulation Authority (SRA), an Accountants Report.
As Reporting Accountants we are required to follow the specific checks and tests laid down by the SRA to enable the Accountants Report and checklist to be completed and signed, whilst this is not an audit to be qualified to do this work as Reporting Accountants, one must be a qualified accountant and a registered auditor. We have been providing this specialist service for over 25 years to our clients.