UK Board suggestion of dropping any external audit

[Jay2]

Hi,
we are a relatively small company , although still make about £200-£300k profit a year
our accounts have always been audited and this gives some reassurance that they are definitely correct , a huge amount of transactions passs through the company as well as physical monies
The MD has suggested that we drop the external audit as it is becoming too expensive (they are in for two weeks), is this something i should be concerned about as would leave myself exposed ? One possible alternative would be to use a local accountancy firm to help for a week with finalising the accounts ?

curious what peoples opinions were

thanks all

jay

 

[kirby]

First, a question:
Was there originally a requirement that meant a full audit was needed? For example, a bank loan that required an annual audit. And if so does that requirement still exist?

 

[Jay2]

First, a question:
Was there originally a requirement that meant a full audit was needed? For example, a bank loan that required an annual audit. And if so does that requirement still exist?

No
We have had an external audit for years , company makes about £300k profit each year but the amount of money that flows through the company is huge .
The FD prior to leaving said to always ensure keep the auditors as he had insisted for years his accounts were audited , for comfort I guess and incase any error discovered later that could come back to get you as a director ?
The MD now wants to strip costs and to end all audits

 

[kirby]

"is this something i should be concerned about as would leave myself exposed ?"
To your question, having an audit is a double-edged sword as far as "exposure" to a financial person. On the one hand the audit provides a second set of eyes to help find any errors. On the other hand, if the auditors find many errors in the handling of the accounts, then the auditors may "point the finger" at the guilty party.

 

[Jay2]

does it not give comfort having the auditors check the accounts though ? rather than risk of any errors being carried forward into future years ?

 

[kirby]

Asked and answered