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Frequently asked questions
An audit is an independent review of your business’s financial statements to verify that they give a true and fair view of the financial position of the company and whether the company is operating in a legitimate manner. As a company grows this becomes more difficult to determine, which is why an audit helps.
An audit can uncover mistakes made along with financial fraud and it also acts as a deterrent for criminal activity.
Usually, if your business is a limited company, it is legally required to have an external audit if any two of the following criteria are met:
- The company turnover is above £10.2 million
- The company assets total more than £5.1 million
- The company has more than 50 employees
Even if the criteria above have not been met, any shareholder who owns at least 10% of the business can make a request in writing to the limited company’s registered address within at least one month before the financial year end that the audit is being asked for.
Banks Sheridan are registered auditors who are approved to carry out Statutory Audits and who are governed by The Institute of Chartered Accountants in England and Wales. We have a friendly and dedicated audit team who will guide you through the legislative requirements and process.
If your company meets the legislative criteria to have an audit you will need to have one carried out each year after your financial year end has passed and you have 9 months to then have it submitted to HMRC and Companies House. The independent audit opinion must be submitted at the same time as your annual accounts filing deadline.
Although every audit will be different depending upon the company, most audits cover similar steps such as:
- discussing the scope of audit work with directors or management and asking a range of questions to understand the company,
- examining the financial and accounting records along with other documents and assets such as plant and equipment
- verifying balances, for example asking a debtor to confirm the amount of debt with the company
- testing of the internal controls within the company
- observation of certain processes being performed
We have a wealth of useful business, tax and financial information in our Information Hub – contact us for help and advice specific to your circumstances.
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