Cardiff Audit Services

Experienced Auditors in Cardiff

With a team with many years of experience auditing companies of various sizes from all over the spectrum of business, we’ve gained the confidence and ability to create a completely unique approach to suit your way of operating.

Harries Watkins & Jones Ltd is registered as auditors in the United Kingdom by the Association of Chartered Certified Accountants (ACCA).

It doesn’t matter what sector you operate in or how your business is structured, we are well suited to deal with any special audit requirements that may come their way.

Typically an audit can be a flash in the pan, causing stress and uncertainty within a business – but it doesn’t need to be like this. Our audit services teams are trained to work in the background of your premises, making sure to plan efficiently to understand how best to work with you. They will minimise any disruption.

Not only will we make sure you’re compliant, but we’ll also ensure that throughout the process we look for opportunities to add value to your business. We’ll identify any problems and new opportunities that could increase resilience and profitability within your business.

Finally, any new legislative changes to the way your finances are reported, we’ll make sure to keep on top of them. We’ll give you advice and information on how you can keep your systems and processes updated.

What is an Audit?

An audit is a systematic and independent examination of financial statements, records, operations, and performances of a company for a stated purpose. Auditors conduct these detailed inspections to ascertain the accuracy and reliability of the information provided by businesses, primarily to ensure statutory compliance.

There are different types of Audits:

• Internal Audit: Carried out for the main benefit of the management of the company to test internal controls and to provide assurance of systems and processes.
• External Audit: Performed by independent audit firms to verify the true and fair view of a company’s financial statements.

Harries Watkins Jones only provides external audit

Primary Goals:

• Assurance: Offering stakeholders confidence in the accuracy of financial reports.
• Compliance: Ensuring adherence to the Companies Act and other relevant regulations.

Audit Process includes:

1. Planning and risk assessment.
2. Gathering of audit evidence.
3. Evaluation of the evidence.
4. Drawing conclusions.
5. Reporting findings.

Auditors have a statutory role in reviewing and confirming the financial activities of companies that are required under UK law to be audited. They follow strict professional standards to maintain the integrity of their work, providing a critical overview of a company’s financial practices, which adds value to the financial reporting process. In the UK, audits support capital markets by enhancing the degree of confidence that investors can place in financial statements.

Different Types of Audit that we can assist with

Audits are crucial for ensuring compliance with various regulations and accountability in financial practices. They can be categorised based on the nature of the organisation and the specific requirements of regulatory bodies.

Statutory Company Audit

A statutory company audit is mandatory for certain types of companies in accordance with the Companies Act. It involves a thorough examination of a company’s financial statements, accounting records, and internal controls. This type of audit is conducted by a qualified auditor or an audit firm to provide an opinion on whether the company’s financial statements present a true and fair view of its financial performance and position.

Charity Audits and Independent Examinations

Charities in the UK may be subject to two types of financial scrutiny depending on their income levels: audits and independent examinations. Charities with a high income typically require a full audit, where an auditor will assess the financial statements for accuracy and compliance with charity law. Alternatively, smaller charities may opt for an independent examination, which is a less extensive review compared to an audit but still provides some assurance that the charity’s resources are being managed appropriately.

Solicitors Regulation Authority Accountants Report

The Solicitors Regulation Authority (SRA) stipulates that legal practices must adhere to specific accounting rules. An SRA Accountants Report is therefore necessary to ensure compliance with these rules. The report includes an assessment of the practice’s handling of client funds, and it must be prepared by an accountant authorised to conduct such reviews by the SRA. The objective is to protect clients by confirming that solicitors handle their funds in accordance with the SRA’s standards.

Auditing Standards and Regulations

Auditors in Cardiff operate under stringent standards and regulations designed to ensure the integrity and reliability of financial reporting. These requirements mandate adherence to established auditing principles and legal responsibilities.

UK Generally Accepted Auditing Standards

The United Kingdom’s auditing standards are defined by the Financial Reporting Council (FRC). The main standards include:

• Ethical Standards for Auditors: These mandate independence, integrity, and confidentiality.
• International Standards on Auditing (UK and Ireland): A comprehensive set of guidelines detailing audit practices and quality assurance.

Legal Obligations for Companies

Audit firms and the companies they audit in Cardiff must comply with several legal obligations:

• Companies Act 2006: It outlines the duties of auditors and the requirement for annual audits for certain types of companies.
• Corporate Governance Code: While not strictly legal, adherence is seen as essential for listed companies.

International Audit Frameworks

Auditors must also be cognizant of frameworks beyond UK borders:

• International Financial Reporting Standards (IFRS): Applicable for global business entities to ensure comparability and transparency.
• International Auditing and Assurance Standards Board (IAASB): Promulgates globally recognised standards, enhancing the quality and uniformity of practice internationally.

What happens during an audit

During an audit, auditors methodically examine financial statements to provide an opinion on the truth and fairness of those statements. The process is systematic and includes various phases from risk assessment to issuing audit reports.

Risk Assessment Procedures

Auditors initially perform risk assessment procedures to identify areas of heightened risk of material misstatement in the financial statements. They carefully analyse the company’s industry, operations, and financial performance using tools such as:

• Analytical reviews
• Interviews with key personnel
• Observation of the entity’s operations

Internal Control Evaluation

The evaluation of internal controls is crucial in determining the organisation’s risk of errors or fraud. Auditors examine controls over financial reporting by:

• Documenting understanding of the control environment
• Testing the operational effectiveness of key control activities

Substantive Testing Strategies

Substantive tests are conducted to validate the integrity of financial information. Auditors:

1. Inspect documentation supporting transactions
2. Verify balances by comparing them with external confirmations
3. Perform analytical procedures to ascertain plausibility

Audit reports

Lastly, the auditors consolidate their findings and compose the audit report, a formal opinion on the financial statements’ accuracy.

Challenges Facing Auditors in Cardiff

Auditors confront a unique set of difficulties. Staying abreast of changing regulations, preserving impartiality, and tackling financial misconduct are central to their role.

Evolving Regulatory Landscapes

Cardiff’s auditors must continuously adapt to shifting regulatory frameworks. With the UK’s evolving financial landscape post-Brexit, they often face the challenge of interpreting new legislation. For instance, the introduction of UK-specific Generally Accepted Accounting Practice (UK GAAP) requires auditors to update their knowledge and practices to ensure compliance.

Maintaining Independence and Objectivity

The principle of independence is crucial for auditors to uphold their credibility. Cardiff auditors must avoid conflicts of interest, which can arise from close relationships with clients. To maintain objectivity, they should implement and follow strict ethical guidelines — such as those set by the Financial Reporting Council (FRC).

Addressing Fraud and Financial Crime

Auditors play a critical role in designing and recommending controls that help prevent future fraudulent activities.