Auditing of accounts

Hoddie_2

Hoping someone can help, I need to engage a professional auditor to check the books of an organisation I am a member of (which is an Industrial and Provident Society). We've always used qualified volunteers in the past but this isn't an option for the current accounting year (ends 31/12/07).

How do I got about searching for a qualified auditor, and what pit-falls do I need to look for? Any help much appreciated.

Savvy_Sue

Can any of your qualified volunteers suggest a company who offer this service?

Hoddie_2

Unfortunately not.

Bean_Counter

What type of audit do you require? I only ask because I know that under the new charity laws in Scotland members of a number of different institutions can act as auditor.

I would first of all check with the Inudstrial & Provident Society to establish exactly what is required and who can perform the audit. Dependent on that then you could approach www.icaew.co.uk (amongst others) for a list of available auditors in your area.

talkinpeace

Do you need an auditor or an independent examiner?
Start by asking around your local parish council / Chamber of commerce / Rotarians.
But be aware that a lot of the Charity type accounts presentation rules have changed lately (that blessed SORP) so they need to be au fait with current requirements.

Savvy_Sue

Now why didn't I think of suggesting you contact the Independent Examiners for advice? They will probably be able to help you.

Hoddie_2

Snippet from the Society's constitution:

87. A qualified auditor must be appointed to audit the Society’s accounts and a balance sheet for each financial year. In this rule "qualified auditor" means a person who is a qualified auditor under Section 7 of the Friendly and Industrial and Provident Societies Act 1968 and Section 25 of the Companies Act 1989.

88. The auditor shall, in accordance with Section 9 of the Friendly and Industrial and Provident Societies Act 1968, make a report to the Society on the accounts examined by them and on the revenue account or accounts and the balance sheet of the Society for the year in question.

Given the above I'm reasonably sure we'd need a qualified auditor. Many thanks for the help, I'll investigate the links over the weekend.

Mike_by_the_Sea

This may help....

qualified auditor Definition


Accountant (or a firm of accountants) which a firm hires as an independent third-party to review its financial information. The auditor's main objective is to verify that the firm's income statement and balance sheet (and sometimes cash flow statement) fairly present the firm's financial position, and that they are prepared in compliance with the provisions of GAAP.

From this is looks like you just need an "independent examiner" to sign off your accounts as per Sue and talkinpeace.

Debt_Free_Chick

Hoddie wrote: »

Snippet from the Society's constitution:



Given the above I'm reasonably sure we'd need a qualified auditor. Many thanks for the help, I'll investigate the links over the weekend.

The 1968 Act has been amended - see here.

But see Section 4 in particular. It seems you can pass a resolution at a general meeting to dispense with the requirement to appoint an auditor. Look carefully at the exemptions .... e.g. credit union, housing association etc - but I guess these do not apply to you.

If you can pass this resolution, then you can dispense with the requirement to appoint an auditor and simply have someone check the preparation of the accounts, to give the members comfort that they haven't been "fiddled". A local bookeeper might be prepared to do this for a nominal fee.

Hoddie_2

Debt_Free_Chick wrote: »

The 1968 Act has been amended - see here.

But see Section 4 in particular. It seems you can pass a resolution at a general meeting to dispense with the requirement to appoint an auditor. Look carefully at the exemptions .... e.g. credit union, housing association etc - but I guess these do not apply to you.

If you can pass this resolution, then you can dispense with the requirement to appoint an auditor and simply have someone check the preparation of the accounts, to give the members comfort that they haven't been "fiddled". A local bookeeper might be prepared to do this for a nominal fee.

Aye, we're aware of this amendment but had been led to believe that it only applied if you had a turnover of less than £25k? The link you provide above indicates it is £250k! Ours was about halfway between the two.

The constitution requires that we cannot hold an AGM without showing audited accounts and yet the above resolution can only be taken at an AGM! Or would the resolution negate the audited accounts clause?

Debt_Free_Chick

Hoddie wrote: »

Aye, we're aware of this amendment but had been led to believe that it only applied if you had a turnover of less than £25k? The link you provide above indicates it is £250k! Ours was about halfway between the two.

hhhmmmmmm ....... is there a regulatory body like the Charities Commission that oversees your organisation? The CC certainly has a very pragmatic helpline for this kind of thing.

The constitution requires that we cannot hold an AGM without showing audited accounts and yet the above resolution can only be taken at an AGM! Or would the resolution negate the audited accounts clause?

Yes - put the resolution first. Having dispensed with the requirement to produce audited accounts, you don't then need to produce them. Or .... produce last year's audited accounts.

HTH