Any registered auditors out there?

[mr. mischief]

I have reluctantly turned down a very good client which is FSA registered as an Industrial and Provident society. The current accountants have gone to sleep on them despite being one of the top firms locally.

I can't accept the appointment as the accounts have to be signed off by a registered auditor. I hate auditing, not least because in my career in industry I saw approx £25bn - yes billion - signed off by auditors which many finance folk in the various companies thought should not have been.

Anyway, if anyone on here can see a way of just signing off the work I have done and they have registered auditor status, please feel free to call and discuss a quote. You would of course have 100% access to all my working files, which are fully spreadsheet / VT based.

It may be that in combination we can offer the client an improved service.

 

[jim_price]

I'm afraid there's no real way of just signing off on another accountant's work. Auditing standards (the latest incarnation being Clarified ISAs) are increasingly onerous, and a good year end accounts file, whilst very useful, will still leave a whole heap of stuff for the auditor to do.

I'd be happy to discuss a quote but I suspect I might be a little adrfit of your expectations.

 

[mr. mischief]

What exactly does the auditor have to do? He or she is not required to perform an audit or give an audit opinion. What exactly is the whole heap of stuff?

 

[jim_price]

"The accounts have to be signed off by an auditor" - I interpreted this to mean an audit report would be attached to the accounts. Perhaps that's not the situation. Good luck with your search.

 

[elaine@cheapaccounting]

He or she is not required to perform an audit or give an audit opinion.

So why do you need an auditor then if an audit is not required or an audit opinion not sought.

When the registered auditor signs off the accounts to what statement are they agreeing?

 

[Grayson Moore]

I must admit when I quickly read the first couple of post I thought the OP was referring to an audit however I suspect the entity actually needs an accountants report rather than an audit report but because of the Industrial and Provident Society registration the accountants report is still required to be actually signed off by a registered auditor.

 

[mr. mischief]

This is the FSA requirement - all quotes for doing the following are gratefully received from registered auditors, who will have a pristine set of accounts and supporting files to work from:

Less onerous than a full audit, the accountant's report must state whether, in the opinion of the qualified auditor making the report:
•
the revenue account or accounts, the other accounts (if any) to which the report relates, and the balance sheet are in agreement with the books of account kept by the society;
•
on the basis of the information contained in the books of account, the revenue account etc. comply with the requirements of the Industrial and Provident Societies Act 1965 and the Friendly and Industrial and Provident Societies Act 1968; and
•
the financial criteria allowing the production of a report instead of a full audit have been met.

 

[elaine@cheapaccounting]

Not a quick job then for anyone to put their name to that regardless of how pristine your accounts are I'm afraid.

 

[mr. mischief]

The last item requires turnover of under £5.6m (£120k expected) and total assets under £2.8m (£400k expected).

 

[Jaydee]

We are Registered Auditors and we have one Industrial and Provident client.

The issue is that all I&P companies require audit as they are incorporated under the Industrial and Provident Societies Act 1965 rather than the Companies Act and the I&P Act did not provide for audit exemption and has not been updated since 1965 - and so comes from a non-exempted era.

A further quirk of I&P companies is that their accounts are filed into the public domain at the FSA in Docklands, rather than at Companies House.

So, they do require a full audit with all of the usual testing, but worse still they are considered by the Institute to be a "specialist audit" and so you are unable to use a standard audit pack, but instead would need a bespoke I&P Act audit pack. Most audit firms prepare accounts using software, but again a non-standard accounts prep program would be required to comply with the I&P disclosures.

Perhaps their current auditors have "gone quiet" as they underquoted?!

 

[mr. mischief]

Thanks for that. I was right to decline the appointment - funny thing is they had appointed an unqualified accountant who had too much work on, so asked me to give a quote!

At least I know for the future. Those FSA filing fees are a real rip-off compared to Companies House too.

 

[Jaydee]

I was typing #10 as you were typing #7 and your third bullet point seems to imply that the I&P Act does now allow for audit exemption.

I am not sure whether that is the case as my audit would be too big to be exempted anyway, but perhaps it is something that you should look into further before declining appointment?

 

[Grayson Moore]

Any I& P Society or Friendly Society with aggregate receipts and payments <£5k, assets <£5k and <500 members is an exempt society with automatic audit exemption. For I&P Societies above this limit, audit exemption is not automatic but requires the passing of a resolution. Audit exemption is gained by considering the thresholds for the previous year, so the vote at a general meeting is for next year’s audit. The resolution will fail if 20% or more of the votes are ‘against’ and 10% or more of members entitled to vote are ‘against’. The Articles may also require an audit, in which case audit exemption is not available

 

[mr. mischief]

I will check with the club secretary. I believe the current accountants - who I worked for as a newly qualified ACA nearly 20 years ago! - purely give an accountants report without expressing an audit opinion. If this was the case, would any qualified auditor like to quote for a review and sign off?

None of the committee members have the foggiest why they are an IP&S legal entity. I guess it's because they are in effect a mutual - but so is the local golf club and that's not an IP&S.