Call 01992 444466

Why sole practitioner accountants need to outsource audits

In its 2017 annual Audit Quality Thematic Review, the Financial Reporting Council found nearly a third of audits carried out “required more than just limited improvements”. In reporting about the review, the Financial Times pointed out that recent high-profile accounting scandals “raise questions about whether auditors are being appropriately sceptical when they scrutinise company accounts”, quoting a £4m fine the FRC had charged Deloitte for its audits of Aero, and a £3m fine against PwC for its audits of Yorkshire-based sub-prime lender Cattles.

Relationship-building with clients

We understand that as the majority of companies start out small – many as sole traders – directors prefer to use the services of a sole practitioner accountant or a small accountancy practice. It’s understandable that the accountant and the client will build a very good relationship with each other, with a lot of trust and loyalty on both sides.

As a business expands, it is inevitable that the director will want that relationship with the accountant to continue – and so it should. The problem for the accountant is that if the company is ever in a position to need auditing, it could become problematic if they don’t have the training and experience to undertake the task.

Many accountants in this situation are hugely reluctant to introduce their client to another accountancy firm as there is a risk that their client could be poached by a larger company. Quite often they muddle through with their own audit – but without the specialist training, experience and accountability, it could leave them vulnerable.

Outsourcing

The best compromise for sole practitioner accountants, or those in firms too small to have trained auditors, is to outsource the task to a registered auditor.

We are Registered Auditors with the Institute of Chartered Accountants in England & Wales and specialise in audits for businesses requiring FCA compliance, charities, pensions and solicitors.

At HB Accountants, we pride ourselves on our ethical stance and would never approach your client.

 

 

Nimbus Green Hosting Logo

© 2024 HB Accountants | Privacy Policy | Disclaimer | Terms of use | Website by Origin 1

Logo of the Institute of Chartered Accountants in England and Wales

HB Accountants is the trading name of HBAS Limited, a company registered in England with registration number 5085258. The registered office of HBAS Limited is Plumpton House, Plumpton Road, Hoddesdon, Hertfordshire EN11 0LB, England. Registered for VAT number 866062806.