Company statutory audit
Audit and assurance
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Year-end
A statutory audit gives the appointed auditor’s independent opinion on a company’s annual financial statements. TheTaxCo plans and performs the audit, discusses findings with management and issues the report through the eligible appointed auditor.
Management remains responsible for the accounts, records, estimates and disclosures. The auditor’s responsibility is to obtain sufficient appropriate evidence and form the required opinion. The engagement begins with appointment, eligibility, independence and reporting requirements. Companies Act, sections 139–145.
What the audit examines
The audit considers whether the financial statements present a true and fair view under the applicable framework and addresses the additional matters required by company law. A small or low-activity company does not escape the statutory audit solely because it has few transactions.
The plan follows the company’s actual balances and risks. A stockholding business may need inventory evidence, ownership and cut-off testing. A service business may require detailed review of contract revenue, receivables and employee costs. Borrowings, related parties, estimates and events after year-end can affect both recognition and disclosure.
Audit aims for reasonable assurance about material misstatement. It cannot guarantee that every error or fraud will be detected. ICAI Standard on Auditing 200.
Additional reporting is assessed separately
CARO 2020 requires additional reporting for companies within its scope and applies from FY 2021–22. Company-class exemptions must be checked before treating it as applicable or inapplicable. MCA’s CARO statement.
Reporting on internal financial controls with reference to financial statements also has its own statutory and exemption analysis. CARO and internal-controls reporting should be settled during planning, so the right evidence and testing can be scheduled. Companies Act, section 143.
A timetable directors can use
Agree the reporting requirements and dates. We establish the accounting framework, appointment position, group or lender deadlines and any additional reports.
Plan the evidence. Management provides the draft trial balance, business changes, significant contracts and the status of reconciliations.
Perform the audit. We test relevant transactions, balances, controls and disclosures, seeking additional evidence where needed.
Resolve findings. Management considers adjustments and explanations; we assess their effect on the financial statements and proposed report.
Complete reporting. The board approves the statements, required representations are obtained and the auditor signs the report when the work supports it.
The dates for accounts circulation, meetings and annual filings should be built into this timetable. Starting planning early does not mean an opinion can be signed before the necessary evidence exists.
Records to assemble
The audit request is tailored to the company. Core records include ledgers and the trial balance, bank reconciliations, customer and supplier ageing, inventory and fixed-asset records, tax reconciliations, borrowings, major contracts, minutes and related-party information.
For each significant estimate, retain the calculation, assumptions and supporting information. Identify material changes after year-end. If an adjustment is posted during the audit, revise the affected schedules, statements and disclosures together so the final version is consistent.
Report and handover
The audit engagement delivers the signed independent auditor’s report and the financial statements to which it relates, together with communications required by the appointment and applicable standards. Separately agreed management observations can identify process weaknesses and suggested actions.
Our corporate filing team receives the signed final set, completes the applicable annual filing and handles registry queries without changing the auditor’s independent report. Audit working papers do not replace the company’s own books and supporting records, which management must retain. Accounts preparation, tax audit and internal audit have separate purposes and must also be considered against auditor independence and prohibited-service requirements.
When the books are incomplete
We can begin planning and identify missing reconciliations before the accounts are final. Bookkeeping completion is then scheduled with the responsible finance team or adviser. Evidence limitations and unresolved material differences may affect the report; the service does not promise an unmodified opinion.
Related services
Email TheTaxCo, message us on WhatsApp or book a call. Include the financial year, business activity, books status and intended reporting date.