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Article

Preparing for your year-end audit

Article

Preparing for your year-end audit

8 Aug 2022

2 minute read

A statutory audit is carried out once a year and can mean a lot of work for a client, especially if there are complexities such as share-based payments, revenue recognition on stage of completion basis etc. For some companies, there is no justification to hire additional staff in just to facilitate the audit.

Preparing for your year-end audit - news article image

A statutory audit is carried out once a year and can mean a lot of work for a client, especially if there are complexities such as share-based payments, revenue recognition on stage of completion basis etc. For some companies, there is no justification to hire additional staff in just to facilitate the audit.

I have supported a client (Solar Water PLC) for their audit on a project basis for two years during which time they have changed auditor from a top 10 UK firm to Shaw Gibbs.

We are able to provide the outsourced project-work as well as the audit without impact on audit independence as the audit and outsourcing departments are entirely separate. The two departments are headed by different Partners and are in fact separate Limited companies. The audit team place no reliance on the work performed and produced by the outsourcing department and transactions entered on the accounting software are scrutinised by the audit team as with any other client. 

This support works well as we look after the client's data on Xero so we are able to carry out a detailed review of each transaction on the trial balance to ensure they are correct and that there is backup information to support the numbers. For Solar Water, we have prepared system notes for each financial element we manage for them (payroll and purchases cycle for example) and prepare the draft accounts which are supported by a set of working papers.

All audit requests come directly to me using the audit system (Inflo) and I deal with these as required meaning that the ‘mopping up’ part of the audit is also taken off the client’s hands.

I am present at the audit planning meeting to help plan the schedule and discuss material risks from the outset and attend the finalisation meetings in order to capture unresolved issues and ensure they are actioned accordingly.

Ngen Yap, Chief Financial Officer for Solar Water comments

“Working with Darshil to help with our audit means I do not have a huge spike in workload whilst the audit is being carried out. Darshil has in-depth knowledge of us, our finances and the software used to manage them, so it makes absolute sense to outsource this work to him.

Initially, Darshil was liaising with a third-party auditor and had an additional advisers’ input on share valuations. He has always dealt with the additional parties with his usual grace and respect whilst pushing for the schedule to be met.

The independence of the audit is well managed by Shaw Gibbs and I have upmost confidence that this is being carried out in the same way as if we were using a separate firm for the two sides of the equation”

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Need expert advice?

Speak to an expert for advice on
+44-1865 292200 or get in touch online to find out how Shaw Gibbs can help you

Email
info@shawgibbs.com

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