What is an audit?
The annual audit is a legal requirement for most established businesses. During the process, a qualified auditor will undertake an independent inspection of your accounts and finances to check for errors or inconsistencies.
The process
But an audit also serves a different purpose.
Alongside filling a statutory requirement, an audit provides deep, independent insights into your business. This enables us to manage ongoing problems, predict future issues and overcome challenges.
This service isn’t an added ‘extra’ – it’s included as part of every audit undertaken by Macalvins as part of our mission to improve your business.
Are you exempt?
The annual audit is a statutory requirement for businesses who meet the revenue threshold. As of January 2020, you may qualify for an audit exemption if it has at least two of the following:
- An annual turnover of no more than £10.2 million.
- Assets worth no more than £5.1 million.
- 50 or fewer employees on average.
The benefits
An audit can provide a high level of assurance that financial statements are as accurate as possible and free of errors. Typically, an audit will include an assessment of systems and internal controls, as well as detailed testing of transactions and balances. The audit process provides:
- Reassurance for shareholders
- Management with ideas for improving systems and controls
- More accuracy in financial reporting and decision making
Audit for charities
Statutory thresholds determine the type of external scrutiny needed for a charity’s accounts. This can range from a full audit undertaken by a registered auditor to an independent check by a non-accountant.
For more information about the threshold requirements, click here.
If your charity requires accounting, audit or assurance support, get in touch with our expert team.