Auditor Conundrum

Auditor Conundrum

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We have a client who is required to have an audit however they do not have the funds to pay for our audit services.

What is the procedure for this predicament? Should we resign?

Any answers would be welcome!

Replies (4)

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By Steve McQueen
22nd Dec 2011 16:51

Why do they need the audit?

The first question is why are they required to have an audit?

The seconds is are you prepared to be paid in installments?

The third is: can they do more to be ready for your audit work so that you can reduce the time spent and so the cost?

The forth is can you get someone else to do the audit part of the job at a cost cheaper than you - although you run the rick of loosing the client

Fifth, how much do you want this client? Is it work taking a "loss" on the job to keep them for other things

Sixth, if they can't pay for this work, what can they pay for, are they a going concern?

In otherwords, to answer you question, we are going to need to know more.

Steve

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By David A
22nd Dec 2011 16:59

They are a going concern

There are going concern  issues however the bank wouldn't allow the company to be wound up and the business is currently being leased to another individual who is now managing the operations. This has all occurred after the year end and an audit is required due to turnover. Retention of the client is not an issue however we need to know if we have a legitimate case for resigning if we cannot be paid for the work we do.

Other issues re fees and client retention and going concern are not fundamental, just need to know if we can resign without any recourse if they cannot pay.

 

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By Steve McQueen
22nd Dec 2011 17:29

You can always resign

If you know you are not going to be paid and don't care about losing the client now or for the future, you can always resign. Issue a disengagement letter telling them where everythings up to and walk away. They won't like it, but its your right to do it.

 

Steve

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Locutus of Borg
By Locutus
22nd Dec 2011 19:32

Sounds like ...
They need an insolvency practitioner more than they need an auditor.

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