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Audit Registration - who keeps their registration when not doing statutory audit work?

Is it worth keeping Audit Registered when no longer carrying out statutory audit work?

We are a small ICAEW practice, and have renewed our Audit Registration, even though the last statutory audit work we did was completed and signed off at the beginning of 2011. We no longer have any statutory audit clients.

Is there any benefit in keeping the audit registration going?

When we did do statutory audit work, it consisted of one solicitor (SAR report), and one statutory audit. We had an external Hot File Review on all the SAR work, and an annual external Cold File Review on the statutory audit work. ICAEW had copies of the Hot File Reviews (and we were happy with this arrangement).

We did wonder about cancelling the Audit Registration at the end of 2011, but did nothing about it.

Now we've been sellected for a Practice Assurance Visit looking specifically at our audit procedures! The fact that everything has been externally reviewed, and that the work is history, has made no difference - the Assurance Visit has to proceed.

So the question is, do any other small practices keep their Audit Registration going, even though they aren't carrying out audit work?

If we cancelled it. would there be any other (non statutory audit) reports that we couldn't sign? We do reports for letting agents registered under ARLA, but as far as I'm aware we don't have to be Audit Regisetered to do this. 

We don't want to cancel Audit Registrationand then find a report comes up that we can't deal with.

Thanks for any advice.

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15th Feb 2012 17:12

I've just given it up following a compliance review

I've maintained the registered auditor status for several years after doing my last audit.  I kept it "just in case" as you never know what's going to happen and it wouldn't surprise me if statutory audits thresholds were reduced again, or if more and more industries become regulated and need some kind of audit or assurance report to satisfy their regulators.

Anyway, just suffered an ACCA compliance review - they weren't interested at all that I didn't actually do audits, nor were they interested that I'd given an assurance that I'd do all the required checklists, procedure manuals, etc before I did any audits.  They were adamant that to maintain the registered auditor status I needed all the paperwork in place.  As I had no wish to waste valuable time on creating and completing forms, checklists, and procedure manuals that are never going to be used (no doubt they'd be obsolete in 2,3,4,5 years or whenever I'd next do an audit, if ever), I was pushed into a corner to relinquish the registered audit status in order to pass their compliance review.

 

 

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I jumped 31 December

I deliberately divested myself of audit work, signing my last report 30 December 2011 with one day to spare.

For me, auditing had become a complete waste of time in that even though my audit clients had not changed much in 10 - 15 years, the amount of audit work I was required to do on them had reached stupid proportions.

Whilst I broke open the bubbly there was never any chance I'd keep the registration not only because of the monitoring (my last was in 2009) but because I'd have had to maintain my CPD on the subject and have an up to date compliance manual and audit programme.

In answer to your question, no I can't think of any thing else you'd need one for and even if they made it a requirement to have audit registration to do them, I'd rather give up Service Charge accounts than maintain the registration.

Two months on and I'm even wondering what benefit I or my clients gain from me having ACCA after my name?

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16th Feb 2012 09:22

It's more trouble than it's worth so give it up. However as you have been selected for a visit I think you'll find that they insists it goes ahead before "they release you from your Audit Registration "

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By newmoon
16th Feb 2012 09:58

You are right

Bernard - you are correct, as ICAEW Quality Assurance happen to have just phoned up, so I asked them, and yes regardless they will still come along and do the visit now, regardless.

 

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16th Feb 2012 09:35

Grant claims?

I have signed off a few quite sizeable grant claims for clients over the years. This was for clients who did not require a stat audit but did need a reg auditor to look at the grants. Presumably if I had not been able to do it they would have had to speak to another firm.

I do periodically think of giving it up, as it is a lot of hassle in some ways.

Having said that I do also audit two sizeable groups of trading companies and a couple of charities as well.

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16th Feb 2012 10:09

Worse!!! If they find anything during the visit that they make a detrimental need for action report on, you will have to take remedial action on the report however stupid that may sound. This could lead to another follow up inspection

My advice is be patient and co-operative during the visit however much you have to grit your teeth

As you can gather I've suffered from this in the past but the end result is you finally get the jobsworths off your back

Good luck

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16th Feb 2012 10:51

Last man standing

I am aware that at least in Scotland, the number of audit registered firms is diminishing rapidly with some members taking the view that they will be in a good position to aquire the smaller jobs who won't pay for Big 4/Top Ten fee levels when the competition is gone.

It seems to me at least that the days of audits being carried out by your average high street firm are drawing to a close. In most cases, I can't see how you could make it pay when you include PII, CPD, registration, training, and all the required programmes/checklists & software.

If most of your clients are accounts prep. under the FRSSE then the knowledge that you would need to maintain exclusively for audits will be expensive and there will be an element of "use it or lose it".

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By DMGbus
16th Feb 2012 13:46

Find a local auditor

A way forward for accountants seeking an escape from unremunerative audits might be to retain those clients requiring an audit as accounts prep and tax advice clients then see if there's a local "still-a-boring-auditor" firm to do the limited amount of audit work required for the client, on the other hand "powers that be" ("powers that like to see the Big 4 Propser?") might frown upon such an arrangement and try and make it uneconomical by imposing extra time-consuming proceedures on the local audit firm that you were to choose.

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Audit as an add-on - beware

DMGbus - I have done that for a number of unregulated firms over the years but it comes with risks.

Firstly, for the auditor, the client is never really their client, ie they really do come in as a necessary evil and so the value of goodwill is £0.  This also makes an already sole destroying piece of work, even more so, especially if the client sacks the useless accountant and the auditor, by connection, is dumped as well.

Secondly, for the unregulated accountant, there is always the possibility that the auditor will find something wrong, perhaps in the tax approach, wrongly prepared dividends, P11D itms, IR35 issues etc etc which not only causes some conflict but also a knock on problem with the client when you have to say "our auditor seems to think that the dividend waiver we did for you last year was invalid".

One I did 10 years ago for an old colleague, unearthed accounting & tax errors going back 3 years and lead to the client sacking & suing the unregulated accountant and a two year tax enquiry.

Thirdly, no matter how efficient the 2 firms are, there will always be a degree of inefficiency and extra cost or, more likely, the perception from the client's point of view that such is the case.

Apart from all that I always found them fun to do!!

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20th Feb 2012 11:41

Outsourced Audit

Audit can be succesfully 'outsourced', I work with a firm who do just that with a number of firms in various locations who either: keep their registration, sign off the audit, but need help with the audit process OR: don't have registration, so pass on this 'burden' and the sign-off to us, with assurances that only the audit work is passed over. If anyone wants more information on the set-up, let me know.

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21st Feb 2012 11:15

@Paul Ellis

I've PMed you.

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By paul799
21st Feb 2012 11:11

External auditor

I formed a company specifically to offer an 'audit only' service as I could see that the market would polarise. The problem was that I did this in 2003 so the mailings that I sent to the local one/two partner firms back then fell on some very deaf ears!! I put my own audits in it anyway and guess now some 10 years later it is time to resurrect the mailings and contact them all again. Send a PM if you would like more info - only really interested in Cambs/Herts/Beds/Bucks mind.

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21st Feb 2012 11:20

A long time ago...

when my father-in-law to be advised me to qualify as an accountant, his view was that once qualified and able to sign an audit report you'd never want for a crust. Sadly that was when the training and professionalism of a qualified accountant was taken as sufficient to support the opinion. As a former sole practitioner I'm sure he'd be shocked to see how regulated and bureaucratic everything has become.

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Sad it's come to this

Saddened and somewhat alarmed to hear of what can only be described as abject stupidity from the powers that be :(

Like others, some time ago we've spotted the growing polarisation and have decided to stay with it. In doing so we've picked up a few audits from firms getting out of the audit market. In some instances the predecessor firm retains the accounts / tax / advisory work. Some cases are pure audits. We've experienced some of the difficulties previsouly mentioned too.

We're happy to talk to firms looking to outsource audit work, reasuringly expensive but very competitive with larger firms! And we always remember who's cleint it really is.

Merseyside / North Wales / North Cheshire

Apologies for the spam!

Please pm me if interested

 

Chris

 

 

 

   

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22nd Feb 2012 08:42

Give it up

I gave up my audit registration on 31 December 2010. Absolutely great !!

No boring audit lectures, Clarified ISAs etc. All our clients under statutory thresholds and not economic to continue when you look at the margin on the job as against regn fees, training, manuals etc. The only job I've had to turn away was a Solicitors Accounts Rules one and as that would have been our only Solicitor, it would not have been really worth it anyway. There is plenty of other work out there without the associated costs and risks.

 

Richard

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22nd Feb 2012 11:55

Each to their own

We have been in the same boat. No audits for ages and wondering whether the hassle and costs are worth it.

However. now glad we did are one of our largest clients business has grown and at least one if not 3 of his companies now need an audit.

Not sure how conversation would have gone referring that work down the road.

Qualifying as a registered auditor is not easy and I would think long and hard before giving it up.

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22nd Feb 2012 13:04

Visit to be cancelled

We've been selected for an audit QAD review and since we longer wish to retain our audit registration have been advised that if we write to the Membership dept of the ICAEW advising them of that fact the visit will be cancelled. Easy decision to make really.

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