Your Guide to Statutory Audits

It is possible that many companies have not had a statutory audit for a long time, if ever. If you are one of these companies, you should really consider whether a statutory audit would help your business.

Statutory audits give excellent and valuable feedback regarding the controls and processes of a company. If you intend on looking for financial investors for your business, then audited financial statements can really help in doing so as it enhances confidence in your business.

If you are considering a statutory audit, we have your complete guide. Keep reading…

1 Define your needs

Jot down a couple of reasons as to why the company is carrying out an audit and appointing an auditor. It may be that it is legally required or that shareholders have requested it.

2 Research the market

Before appointing the auditor, do your research. Meet a couple of auditors and discuss the requirements of your company. This is so that you can check out the auditors working and communication style.

3 Appoint the auditor

The directors usually appoint the first auditor; they are then appointed or reappointed at each AGM. The Companies Registration Office maintains a register of all those individuals and firms that are appropriately qualified to provide statutory audit services.

4 Preparing for the audit

To ensure that the audit process is as efficient and effective as possible, you should engage as early as possible with the auditor to agree a timeline and prepare the relevant records. The auditor may be able to assist you with these final preparations, although there are limits, due to independence rules, as to what the auditor can do.

The auditor will generally arrange a planning meeting. An engagement letter will issue, which sets out the respective responsibilities of the auditor and the director. This should be reviewed carefully. Ask the auditor to explain any terminology that you are not familiar with.

5 Final report

A final statutory audit report setting out the auditor’s opinion will issue to the members of the company. The key findings and shortcomings noted in the company’s internal controls and processes will be outlined, providing you with insight into the business and a deeper understanding of the potential risks you may be exposed to.

If your considering a statutory audit or just want some general accounting advice, then contact Kilcoyne Accountants today. You can also find us on Facebook.

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