How firms are plugging the audit gap

As predicted the increase in the audit threshold last October to the European maxima of (two from) £6.5m turnover/50 employees/£3.6m balance sheet total assets has caused many smaller firms to reconsider their audit registrations.

But if that work goes, what are they doing to replace it? The question arose at the recent CCH conference in London, and the answers from practitioners pointed to closer involvement in clients’ business processes and doing more work for less cost through the effective use of technology.

“When I started, we were historians. Now I have to work with where we are today,” commented one small practitioner.

Laura Ambrose, a partner with Haslers in Loughton, Essex, agreed and said her firm was moving more into strategic support and “hands-on” work with clients. “Knowing what’s around the corner is what it’s all about,” she said.

As a 12-partner firm, Haslers has the resources to cover the costs of compliance and training, but she was aware that firms with just a few partners were turning away from audit.

With that work in decline, Ambrose explained why Haslers is focusing on business strategy and helping firms to grow...

Continued...

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Comments
Paul Scholes's picture

That's nothing......

Paul Scholes | | Permalink

for those who remember the first audit exemption twenty years ago.  The firm I was with lost 80% of its audit work overnight, and what did we do then? 

We used to get up, half an hour before we went to bed, and found other, more valuable & constructive, work to do for the clients.

You try and tell the young people of today that, they won't believe you!

Locutus's picture

Exactly

Locutus | | Permalink

Paul Scholes wrote:

for those who remember the first audit exemption twenty years ago.  The firm I was with lost 80% of its audit work overnight, and what did we do then? 

We used get up, half an hour before we went to bed, and found other, more valuable & constructive, work to do for the clients.

You try and tell the young people of today that, they won't believe you!

I'm just about old enough to remember that first big audit exemption in the early 1990s and the silly compilation report, which was a sort of "we've checked some stuff but not done a proper audit".  A few years later the compilation report was scrapped altogether and the main audit exemption rose even higher.

As far as most small practices are concerned, the auditing of limited companies (unless the industry requires it to be audited) became a minor-issue years ago.

The last time I did an audit was about 4 years ago and I'm not sure I will ever do another one in my career.  I'm quite happy with that.  Auditing these days is more hassle than it's really worth with lots of box ticking and low margins.