Random Question

PrimblePrimble Experienced MentorRegistered Posts: 734
My manager and I were wondering yesterday after discussing when the accountants were coming in who does the accountants accounts? are you allowed to do them yourself or do you have to pay another firm to do them

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    I do my own :)
  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    No reason you can't do your own.

    My boss does his but he gets it independently reviewed for a bit of objectivity
  • PrimblePrimble Experienced Mentor Registered Posts: 734
    what about the accounts of an accounts practice? like the big ones
  • katz568katz568 Feels At Home Registered Posts: 93
    If audited or independant review afterwards I can not see a problem with them doing their own
  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    they would do their own I'm sure, why would they want the confidential details going elsewhere?
  • umerali2003umerali2003 Trusted Regular Registered Posts: 400
    after reading this post one question came in my mind as well .... who audit the auditors ??
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    after reading this post one question came in my mind as well .... who audit the auditors ??
    Another audit company.
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    Rinske wrote: »
    Another audit company.

    So in the end, independance is impossible! :D
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    As long as you don't need to be audited, you can be pretty much independent though.
  • umerali2003umerali2003 Trusted Regular Registered Posts: 400
    Rinske wrote: »
    Another audit company.

    why should one allow their competitors to audit their financial statements If they do the competitors can benefit a lot by looking at each others work . i am still confused who audit the auditors
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    why should one allow their competitors to audit their financial statements If they do the competitors can benefit a lot by looking at each others work . i am still confused who audit the auditors

    Auditors will audit auditors, who else could do?!

    I suppose you could have a small firm as Rinske mentioned, that comes under the limit to be audited, but then there couldbe issues with a large firm using them, if it accounted for a large proportion of their income...
  • jenny3549jenny3549 Trusted Regular Registered Posts: 472
    My friend used to be an auditor at PWC in Swansea and once a year used to get sent to audit PWC in London so they do their own.
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    jenny3549 wrote: »
    My friend used to be an auditor at PWC in Swansea and once a year used to get sent to audit PWC in London so they do their own.

    An internal audit?

    Surely there isn't enough independance to audit another branch?!
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    I find that very odd, but then again, am not working in audit, so can't really say that much about it!

    How can they say they are neutral when auditing their own books?
  • umerali2003umerali2003 Trusted Regular Registered Posts: 400
    Rinske wrote: »
    I find that very odd, but then again, am not working in audit, so can't really say that much about it!

    How can they say they are neutral when auditing their own books?


    Agree with you its like marking your own exam
  • umerali2003umerali2003 Trusted Regular Registered Posts: 400
    PGM wrote: »
    Auditors will audit auditors, who else could do?!

    I suppose you could have a small firm as Rinske mentioned, that comes under the limit to be audited, but then there couldbe issues with a large firm using them, if it accounted for a large proportion of their income...


    i think you mean to say those who are earning less then 5.62 M they are not required by law to get audited but that is totally a different argument

    if you say auditors will audit auditors ........ DO KPMG gets audited by Ernst and young ?
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    Agree with you its like marking your own exam

    Or marking the exam of a colleague from another branch! ;)
  • umerali2003umerali2003 Trusted Regular Registered Posts: 400
    but in both cases the independence is questionable ?
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Agree with you its like marking your own exam
    Wouldn't that be nice?
    At least you would be able to keep all those circumstances and distractions in mind. Plus you can read what you meant to say instead of what you actually said if the first is closer to the answers.

    On topic: I still find it unlikely auditors can audit their own books, and would expect others to check it.
    It might be a particular issue with competitive advantage, but the stringent rules which auditors have to apply to, are supposed to stop them from using what they learned in the audit, although I have no clue how that would be checked.
  • BluewednesdayBluewednesday Font Of All Knowledge Registered Posts: 1,624
    Aren't most of the big accountancy practices partnerships which don't need a legal audit?
  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069
    BW I was thinking that. Though I would expect them to be LLPs, I don't know if that changes it (I would guess so)
  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    Professional bodies audit the auditors! For example my firm is regulated by ACCA so we have a monitoring visit by ACCA inspectors every few years to make sure standards are being maintained (they concentrate on audit files and regulated clients [e.g. solicitors] but also review non-audit files). If you are very good you get a seal of approval (as we did last year - yey!!!) called the 'Quality Checked' seal of approval by ACCA. ICAEW regulated firms are regulated by their Quality Assurance Directive (QAD) who do the same as the ACCA Monitoring Unit. The Big 4 audit firms are regulated by the Audit Inspection Unit (AIU) who are a branch of the Financial Reporting Council.

    Kind regards
    Steve
  • PrimblePrimble Experienced Mentor Registered Posts: 734
    lol this turned into quite a thread just from my manager and i having a ponder over a cuppa
  • umerali2003umerali2003 Trusted Regular Registered Posts: 400
    Professional bodies audit the auditors! For example my firm is regulated by ACCA so we have a monitoring visit by ACCA inspectors every few years to make sure standards are being maintained (they concentrate on audit files and regulated clients [e.g. solicitors] but also review non-audit files). If you are very good you get a seal of approval (as we did last year - yey!!!) called the 'Quality Checked' seal of approval by ACCA. ICAEW regulated firms are regulated by their Quality Assurance Directive (QAD) who do the same as the ACCA Monitoring Unit. The Big 4 audit firms are regulated by the Audit Inspection Unit (AIU) who are a branch of the Financial Reporting Council.

    Kind regards
    Steve

    Nice one thank you very much steve
  • RinskeRinske Font Of All Knowledge Registered Posts: 2,453
    Indeed. Thank you very much Steve!
Sign In or Register to comment.