Although the audit and review thresholds were raised back in 2016, relieving many companies of the obligation to do so, companies’ turnover, asset volume and number of employees have increased in many sectors, making the topic of the audit salient again. An audit is also required if a company wants to receive a bank loan – audited financial results are one condition for the bank even agreeing to consider a request for a larger loan. In addition, an audit or review will be needed by any company that plans a public offering on a regulated securities market or Nasdaq First North.
A convenient way to find out whether a company is subject to an audit or review requirement (the criteria are revenue, asset volume and number of employees) is the audit calculator.
You will need to fill in the revenue, asset volume and number of employees in the calculator to learn whether a company needs to order an audit, review or neither. If an audit or review is required, it is worth choosing an auditor today. If you wait until the New Year, the experienced, good auditors will already be booked.
Companies not required by law to have their annual reports audited should also consider what they might get out of an audit? Actually, quite a lot of useful information: the auditor will review the annual report as an independent expert and evaluate whether accounting processes are in line with the regulations. If anything needs to be remedied, the auditor will let the company management know, and they can also give recommendations for eliminating the shortcomings. That is important for protecting a company from fraud and misstatement! There is another alternative, one that gives less certainty and is less voluminous: the review engagement. While it does not give as much assurance as an audit, it is a good opportunity to make sure financial reporting meets the requirements.
To sum up, management can obtain valuable information from the auditor, including proposals for making the billings system more effective. An audited report also doubles as a form of marketing brochure – an unqualified audit report increases trust on the part of partners and clients.
