Audit & Assurance
An audit is the examination of the financial report of an organisation. The financial report includes a balance sheet, an income statement and notes comprising a summary of significant accounting policies and other explanatory notes The purpose of an audit is to form a view on whether the information presented in the financial report, taken as a whole, reflects the financial position of the organisation at a given date, for example:
- Are the organisation’s assets properly recorded in the balance sheet?
- Are profits or losses properly presented in accordance with generally accepted accounting principles?
Auditors must follow auditing standards which are set by a government body - in the UK this is Financial Reporting Council.
A statutory audit is mandatory for most charities and where an organisation has two of the following:
(i) annual turnover of no more than £10.2 million;
(ii) assets worth no more than £5.1 million; and
(iii) 50 or fewer employees on average
Often a audit requires consideration of non-financial factors such as governance. Auditors are therefore well positions to provide wider assurances outside of a statutory audit on businesses. One of the most common is due diligence where a buyer (and to a lesser extent a seller) seek comfort and a second opinion on the assets, liabilities and profitability of the target along with plans which the buyer has for the target business.
Johnsons provides a wide range of assurance services to includes including statutory audit and acquisition due diligence.