Auditing is a sub sector of accounting which often goes under the radar. Many clients will often need help with their payroll, bookkeeping, corporate finance, and even their tax planning. Auditing is commonly a service where people believe it isn’t necessary or worth the money. Carrying out audits is a key aspect of ensuring a company’s accounts are accurate. It also helps determine finances are distributed in an efficient and compliant manner.
With the constant and ever-growing scrutiny from governmental departments such as HMRC, auditing is as important as ever. In the event of a financial investigation, an auditor will be called upon to examine that business’ finances meticulously. Auditing can also be a process, externally and internally, to diminish risk and recognise areas where savings can be made. From a compliancy perspective, it is one of the most critical and multi-functional services an accountancy firm provides.
Our Director of Audit, Lorraine Curtis, shares her thoughts on the challenges that audits face, whilst we also break down why it’s so important for businesses to audit their finances and how Nordens can help…
What Are The Challenges That Auditing Faces?
Audits are important aspects for many companies these days. Without audits, there would be little trust in both financial and non-financial information produced by companies. There would also be a lack of funding opportunities for SMEs, hindering their chances of growth. As well as this, there would be plenty of opportunities for fraud to take place amongst companies.
The perception of auditing amongst the younger generation is an interesting one however. Lorraine states, “Recently, I attended a conference where the first poll that was run asked what the attendees thought the biggest concerns of an audit practice was with options ranging from profitability to talent retention to the impact of the new quality management requirements on firms. I was surprised that over 70% of the attendees stated that talent retention was the main concern above all else.”
Most sectors are facing these problems, with a lack of talent translating to not properly recruiting. Lorraine goes on to claim, “My job is challenging and ever-evolving with new technology helping keep up with the changes in legislation and regulatory requirements. Staff are continually learning, developing, and improving as there are ample opportunities within this industry. I work with fascinating people in a range of industries which enables me to learn. It also enables me to understand how lots of different companies work and function across a range of various sectors.”
Auditing can often be mislabelled as just examining figures and number-crunching, with no refreshing, new element to contend with. This can’t be further from the truth, as Lorraine believes, “Every day there’s something different to work on, there are no two jobs the same. The length of the audit means that you are moving on to new work and clients regularly. This ensures there is a lot of variety within the role. There are also no specific requirements for audit staff to have a qualification before joining the profession. I didn’t have one when I started, I just had a love of numbers, a passion for learning more about accounting, and an inquisitive mind. Audit isn’t restrictive, it is dynamic, evolving, and a great career opportunity for anyone to thrive in.
Why Does A Business Require An Audit?
An audit is fundamental for companies as it delivers credibility to a set of financial statements. This in turn provides shareholders and stakeholders with the confidence that the accounts are verified, legitimate, and fair. This can also translate to improving the business’ internal systems and processes, streamlining procedures to make reporting financial information hassle-free.
A high quality and adept auditor will know financial figures isn’t the only thing to focus on. Audits can help gain an internal understanding of your business’ actions. This allows for the identification of potential fraud to come to light, whether this is internally or externally. By then acting on this, it can provide a business with the insight and protection to amend and alter how services are carried out in the future.
An audit is a statutory requirement by law if two of the following apply:
- the company has an annual turnover of more than £10.2m
- the company has assets of more than £5.1m
- The company has more than 50 employees on average
Moreover, some companies must have an audit, and these include:
- A public company
- An authorised insurance company
- A company involved in banking
- A company whose shares are traded in a European state
As well as this, if more than 10% of the shareholders request an audit then this must be undertaken.
How Can Nordens Help With Your Auditing Requirements?
Our Audit department at Nordens can tailor the appropriate audit work to the size and complexity of the operations of the company. This removes a lot of the unnecessary audit work to create a more efficient audit process for everyone. No matter what type of business you are, or the type of audit required, Nordens will work with you to determine exactly what is needed. This will help you safeguard and streamline your financial information, providing clarity and highlighting any red flags which could rear their head down the line.
An audit of your firm may seem to be a difficult process, but we are here to assist you. We can help you figure out what to do if you’re audited and what information you’ll need to provide. We can also put you in a better position in the future because our experts can assist you in gaining a better knowledge of your present condition. This will give you the confidence you need to make the right choices for the future of your company.
We hope this has outlined to you some of the challenges that auditing could face in the future, and why audits are so important for businesses. If you’d like to know any further information on anything mentioned, or anything accounting related for that matter, please do not hesitate to get in contact with us at Nordens, where one of our trusted advisors would be happy talking you through your query.