The changing face of company audits
Michelle Fisher of Sobell Rhodes explains how a new assurance service can help audit exempt companies save money whilst ensuring that their accounts are reliable and accurate.
The assurance service is a new reporting option pioneered in the UK for audit exempt companies that can only be offered by chartered accountants. This groundbreaking new facility offers a welcome aid to businesses during the recession, as well as raising the profile of chartered accountants and the services they offer.
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"Slow Burn"
is the right description for this service!
Firms offering it are finding real interest from clients but not many firms are offering it.
The timing though may now be better?
- Stricter QAD reviews of audit files
- A further increase in audit exemption limits
- The need to start using Clarity ISAs soon with extra cost
- Significant international interest in the ICAEW's guidance and Assurance Service
Providing the cost/benefit relationship is right for the client, and that bankers/lenders/credit reference businesses value it sufficiently , it could replace many existing audits, and take the place of many existing Chartered Accountants Reports on Audit Exempt Companies. It certainly can provide an additional option for both existing clients and new clients
I was fascinated to hear about this at the recent ICAEW event
Michelle was one of the speakers at the ICAEW National Practitioner Forum about which I wrote last month. The main focus of the event was the future of auditing. I recall that Michelle spoke of her enthusiasm for the alternative assurance product described in her article above and which is available from an increasing number of Chartered Accountancy firms. “The Assurance Service” was introduced over two years ago and was highlighted in AccountingWeb's Practitioner’s Diary on 8 November 2007.
I'm in no doubt that the use of such assurance services will grow but it's evidently a 'slow-burn'. Two and half years on and it's still not that common.
Expensive ICAEW project
If the take-up of the service was low when the economy was good what's it going to be like when it's not and everyone is trying to cut discretionary costs?
My null hypothesis would be that it is yet another expensive ICAEW project that is really of little relevance. As ever, I would welcome some figures on take-up from the ICAEW but they would need to be accompanied by details of the costs of the project including the full costs of the staff involved.