How do you know if you need an audit?

 

 

Audits can be seen as something of a chore, sometimes even a process to be feared. But a quality independent Audit can benefit your business both immediately and in the long-term.

The primary goal of an Audit is to meet your legal obligations. It’s a way to ensure the financial statements are fairly presented and that they are in accordance with accounting principles and legislation. By analysing statements and reports, an Audit can provide valuable insights into areas where your organisation might improve its efficiency.

There are a few rules that make it mandatory to have an Audit:

• If your turnover exceeds $25 million, 
• If your total assets exceed $12.5 million,
• If you have 50 or more full time employees.

This must be self – assessed from your financial statements and if you pass 2 out of 3 of the above tests, you are considered to be a “large company”. Under corporations legislation an Audit then becomes mandatory.  If you are a group structure, the rules apply on a group basis.

There are other situations that may result in an Audit

• If you are borrowing money, a lender can dictate an Audit,
• In certain situations, a shareholder or group of shareholders can insist on an Audit,
• If you are a foreign owned company, then there is a requirement for you to be audited subject to conditions (call Altus if you are unsure if this includes you).

Are there other types of Audits I need to be aware of?

There are a number of other types of Audits that are separate from corporation type Audits.  The following require an annual Audit:

• Legal Practitioners Trust,
• Real Estate Trust,
• Strata Managers Trust,
• Australian Financial Services Licensees.

Also worth pointing out is 'not for profit organisations' could require an Audit, which will depend on the annual revenue.

There are sometimes situations where YOU may wish to initiate an Audit.  If you find yourself saying the following, you should seriously consider an Audit:

“I’m in a new senior position in a company and I want to make sure everything is OK.”

“We just had an employee leave and we want to be sure everything is OK.”

“We had an embezzlement and want to know how much we lost and how to prevent it in the future.”

“We think our bookkeeper is embezzling and we want you to find out for sure.”

Or most frequently, “things just don’t seem right.”

Altus offers a range of statutory Audit services for organisations of all sizes from small businesses, through to public companies, overseas subsidiaries and associations.