Auditing Costs

damienom

Hi folks,

What, on average, is the cost of getting accounts audited?

MartMax

there is no average... it's all depends on the volume of work, type and size of business, risks, complexity, and of course what ever job profitability the auditors looking for. and yeah, depends whoever doing the job, small practice or the big 4.

Marty

Bren1609

1% of the turnover is a rough indicator.

damienom

It's a very small operation, company dealing with funding less than 10K. Money will be coming into the account from one source and going to 2 or 3 others.

I should budget for a couple of hundred quid so??

Cheers for your help.

I would budget for a lot more than a couple of hundred. Regardless of company size, certain procedures have to be carried by auditors in the course of their work, and imho you would be doing well to come in under 1,000 euro.

On a brighter note, it sounds like your company could be a candidate for audit exemption? If so, this would reduce accountancy costs somewhat!

damienom

I'm getting funding from a Government organisation, one of the conditions is that that accounts have to be audited at the end.

This is starting to sound very complicated!

No bud, its not that complicated at all!
Some pointers:

1. Keep your records as thoroughly and clearly as possible. The more work you do, the less the auditors will have to do., therefore reduced audit fee.

2. Audit Fee can be written off against tax.

3. Presume you are VAT registered, so claim back VAT on their fees.

4. Shop around, and get quotes from various practises.

LouOB

also, if your profit below certain amount you dont have to register for VAT. Why do you think you need audit?

damienom

It's a condition of the funding that you're audited before the final installment of funding is paid.

The company has been set up especially for the project we're working on so I'd imagine it's a fairly simple process compared to others. There's not a cent in the bank account yet.

chump

damienom wrote: »

It's a condition of the funding that you're audited before the final installment of funding is paid.

The company has been set up especially for the project we're working on so I'd imagine it's a fairly simple process compared to others. There's not a cent in the bank account yet.

it's the same evidence to show there isn't a cent in the bank account as there is to show there's 1m in the bank account

viztopia

as an auditor it always continues to amaze me when people ask how much an audit (how long is a lenght of string?) is and how little people value the auditors work. I personally wouldnt even consider doing an audit for anything under €1,000 and if someone were to complete an audit correctly, regardless of turnover their costs would be in the region of €1,000.
Remember going for the cheapest audit fee may not always be the best option. Ask the government agency that you are dealing with if they can recommend an auditor or ask your friends and family for a recommendation.

damienom

Apologies Viztopia but having never having had an audit done before you can understand the innocence or naivety involved.

The principal reason for asking was purely for budget reasons. Of 5 firms rang previous to posting none would provide even a ball park figure.

You'll be glad to hear I'm not going to recruit an accountant from PMs sent or ads in the back of the Metro.

The agency involved have told us for legislative reasons they can't recommend one or allow their own firm to do it.

smcgiff

damienom wrote: »

The principal reason for asking was purely for budget reasons. Of 5 firms rang previous to posting none would provide even a ball park figure.

Keep trying. If you can provide a basic enough amount of information you should be able to get a ball park figure. Next time you talk to an audit firm, say they're the 6th company you've called and that each time you couldn't get a ball park figure. Tell them you will keep going until you get at least a ball park figure.

smcgiff

viztopia wrote: »

as an auditor it always continues to amaze me when people ask how much an audit (how long is a lenght of string?) is and how little people value the auditors work.

Well, as an accountant that's been audited more times than he'd care to mention, I can't believe how much auditors charge, especially when external auditors are so easily fobbed off. I'm talking about both big four and mid size audit practices. Now, internal auditors are a different kettle of fish.

Ask any accountant in industry who they'd be the most anxious about (even if you think everything is squeaky clean). A twenty year old part-qualified auditor sitting down with them or a seasoned internal auditor who probably knows the company better than they do and you'll get some idea why people aren't so convinced as to the worth of audit fees.

Bren1609

Most companies are audit exempt now anyway.

It's true what previous poster said about how little clients value audit work. It's a fair enough point when you consider the time involved. I think someone made a point on a previous thread that there is no money in audits.

1. The client doesn't see the value
2. It's very hard to agree a decent fee

I personally think that tax is the place to make money as an accountant.