Belt and braces - when a statutory audit saved the day
With thresholds requiring statutory audits going up in recent years, many SMEs have been able to avoid them all together. It’s easy to see why skipping the process might be attractive - it costs money and takes up time - but there are occasions when an audit can play very much to your advantage.
We recently worked with another local firm of accountants to undertake an audit. Their limited-company client had enjoyed a good year, growing enough to pass the new, higher audit threshold. However, we found that an inappropriate accounting policy had been applied and when revised, the result was a significant reduction in reportable profits, and a requirement to restate and unravel earlier dividend payments. We were able to minimise the impact of the profit re-statement and its implications for previously submitted corporate, personal and payroll tax returns.
It’s just one example of how the statutory audit - for so long seen as a necessary evil - can sometimes act as a very useful double check.
Find out more about our audit services here.