Should I Outsource My Financial Audit?

Should I use outsourced financial audit services?

Unless you meet specific exemption criteria, your business will be legally required to have a financial audit completed at certain trigger points in your growth. If you have an internal accounting team or a trusted chartered accountant, you might think that it’s a job for them. But here, we take a look at the reasons that you should consider using an outsourced financial audit services provider for complete peace of mind.

Firstly, you need to ascertain if, or when, you need an audit. We published an article recently explaining exactly what an audit is, outlining the trigger points at which you have to have one carried out, what the process is and what benefits there are aside from the obvious legal compliance one.

If you find you are at a point where a financial audit is required, it’s time to assign the task to someone suitable, but who is that someone?

Here are the things you need to consider before you decide.

Who is allowed to carry out a financial audit?

A financial audit is a specific and precise independent inspection process to ensure that a company’s accounts have been kept and filed in compliance with regulations – which means that it’s not something that just anyone can do.

The person you choose to conduct your audit must be fully qualified and registered as a statutory auditor by one of the recognised supervisory accountancy bodies able to do so, which are:

• The Association of Authorised Public Accountants (AAPA)
• The Association of Chartered Certified Accountants (ACCA)
• The Institute of Chartered Accountants in England and Wales (ICAEW)
• The Institute of Chartered Accountants of Scotland (ICAS)

The auditor you appoint should also hold a suitable level of professional indemnity insurance cover.

Often, financial audit services are part of your chartered accountant’s provision, which means you could ask them to carry out the audit for you. Or in some circumstances, maybe someone in your in-house team may appear to have the required skills. However, that doesn’t necessarily mean that either of these options are the right options.

Independent, in-house or your existing accountant’s financial audit services?

When choosing who to do your audit, remember that this process is designed to be an independent inspection of your business accounts. This means that your in-house team are likely to be out of the question – although you will need to appoint one person from your team to assist your chosen auditor by providing the right information to help them get the job done.

It’s also important to remember that you take dual responsibility for ensuring that your audit is done correctly and generates the right outcomes. Your in-house team is ideally placed and qualified to manage an internal audit, and they can be a great help when it comes to business, growth and strategy planning. However, it’s impossible for an employee to take a truly objective view when auditing your own organisation and/or colleagues.

It’s also fairly unlikely that you’ll have a member of accountancy staff with the necessary audit skills and also the professional registration required.

Finding the best outsourced audit provider

Before you appoint an external auditor, there are a few things to check:

• Ensure that they’re fully registered with one of the appropriate bodies outlined above
• Find out what the auditor needs from you to conduct their job e.g. payroll reports, bank account access, ledgers, legal documents etc.
• Look at their online reviews to see what past clients have said about their auditing standards
• What’s their fee? Are there any potential additional costs to be aware of?

All financial audits must be conducted in-line with UK audit regulations, so making sure you have a truly independent and experienced service provider is pretty crucial if you want to ensure it’s completed according to compliance requirements.

Get advice from an external auditor

If you’re due an audit and you need a professional to help, we’re always on hand to talk you through our financial audit services so please contact us and we’ll be happy to help.