Hi there, I have been asked if I would be interested in auditing a local Womens Institute Accounts, I am not sure what is involved so I have asked the lady to find out if it is an accountant that is needed? rather than a qualified bookkeeper, does anyone here have any experience of this or what might be involved. I am going to speakt to the ICB tomorrow (James would appreicate some advice) or the IAB. Thanks very much.
although the title accountant is not protected in law, the titles of Auditor and insolvency practicioner are protected.
If you do not have an audit practice certificate from one of the bodies able to issue them then you cannot perform the external audit of financial statements that you seem to be indicating that you have been requested to.
Even many qualified accountants with ACCA practicing certificates are not allowed to perform audits as the practice certificate for that work is quite different, even more expensive and much more demanding to achieve.
Whichever accountant you find for this task must be a registered auditor.
Sorry that this is not a more positive response but al the best with any non audit work that you get to do for them.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I have carried out internal audits for my local parish council for years, I am a full member of MICB. Should I not be doing this? Is there a course or exam to take to to allow you to audit?
I personally don't believe that there is any reason why you shouldn't (providing you do not breach any ICB remit of going beyond your comfort zone in services that you provide or are not covered to do internal audit work by your PII).
And the longer answer :
it all comes down to whether others will be dependant upon the findings of the audit. For that reason internal Audit of the local parish council is quite different to approving the financial statements of an entity on which providers of finance or shareholders might depend.
To be an auditor you must be authorised to do so via one of the recognised qualifying bodies. Those are :
Association of Chartered Certified Accountants (ACCA) Association of International Accountants (AIA) Institute of Chartered Accountants in England and Wales (ICAEW) Institute of Chartered Accountants in Ireland (ICAI) Institute of Chartered Accountants of Scotland (ICAS) Chartered Institute of Public Finance and Accountancy (CIPFA)
Members of other bodies are allowed to perform audit work only where they come under the control of one of the above (such as the AAPA being a subsidiary of the ACCA).
As noted in the first paragraph though, internal audit which reports to management is not so strictly regulated. Anyone can work in internal audit although it is advisable to have a basic knowledge of audit techniques (See ISA's 500 to 580).
If however you are interested in taking a career in internal audit to the next level you might want to check out the site for the institute of internal auditors (IIA) who offer certification courses which would result in having the designation of CIA.
I don't profess to know a great deal about this institute they are just one that I came accross whilst doing ACCA paper 2.6 (now F8) as you need to have knowledge of both Internal and External audit when studying towards an external audit qualification.
Hope that this helps,
kind regards,
Shaun.
P.S. edited because my fingers and brain seem to have fallen out with each other! Just had to put the missing words in that I thought that I had written first time around but seem to have gone walkabout.
-- Edited by Shamus on Thursday 12th of May 2011 11:51:36 AM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
You may find that in their governing document (constitution if a charity etc) their accounts actually require an independant examination, rather than an audit. Whilst "auditor", as Shaun rightly says, is a protected title, an awful lot of (lay) people bandy the phrase "need an audit done" without realising the possible implications!
Would be very surprised if your local WI actually have to have an audit!
I'd agree with that. It seems unlikely that they'd need an auditor, probably more that they want someone to check over the books to see if everything has been done correctly. Best to check with them exactly what they mean, bearing in mind Shauns explanation at the same time.
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Jenny
Responses are my opinion based on the information provided. All information should be thoroughly checked before being relied on.
many banks staff have no idea what the difference is between audited and unaudited accounts. And beyond that, much of the business side of the banks is geared towards lending to larger businesses. For micro businesses what they actually mean is a set of accounts prepared and verified by an accountant.
For larger entities which really do need a statutory audit the bank will of course also require an external auditors report but for micro businesses which we're talking about here unless you are dealing with some spotty teenager at the bank who thinks he's a bank manager because of the plaque they stuck at the end of his desk and doesn't even realise that not all companies accounts need to be audited then a couple of years sets of accounts verified by a suitably qualified accountant is all that they are really looking for.
Actually, if you think about it a compilation engagement is actually a form of audit so in just putting the books together you could argue that they are audited. Just not the sort of audit that an auditor would perform.
All the banks are really looking for is verification that what they are being told is correct and if that information comes from a professional accountant then they will believe them... And if the financial statements do not paint a true and fair picture of the entities affairs then the bank will spare absolutely no expense going after the accountancy practice. (See the RBS vs Bannerman Johnstone Maclay & others (2002)).
Banks have huge in house legal departments that are paid regardless of what task they are doing so cost benefit doesn't come into the equation as much as with companies (and HMRC) that outsource the legal side.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
