An opinion is only worth what stands behind it.

An audit is not a search for wrongdoing and it is not a formality either. It is an independent opinion on whether a set of accounts shows a true and fair view — and the value of that opinion to a bank, a buyer or a member is precisely that it was not written by the business.

What is undertaken

The work only a chartered accountant may sign, and the internal work that finds things before an auditor does.

✓Statutory audit of companies
✓Tax audit under section 44AB
✓Internal audit and process review
✓Stock audit and concurrent audit for lenders
✓Trust, society and co-operative audits
✓Certificates — net worth, turnover, utilisation

The kinds, and what each is actually for.

Statutory audit

Required of a company by the Companies Act, whatever its size. The auditor reports to the members, not to the management — which is the point of it.

Tax audit — section 44AB

Triggered by turnover, or by declaring below the presumptive rate. It is a report to the department in a prescribed form, and it is due before the return that relies on it.

Internal audit

Not statutory for most businesses and often the most useful. It looks at how money actually moves through the business — who can authorise, who can pay, who reconciles — and finds the gap before somebody else does.

Stock and concurrent audit

Usually asked for by a lender against whose facility the stock is charged. What is counted, how it is valued and whether the book figure survives the count.

Trust and society audit

Charitable trusts, co-operative societies and housing societies each have their own audit requirement and their own form, and their own filing dates.

Certificates

Net worth, turnover, utilisation of funds. Signed where the underlying records support them, which sometimes means the work is to get the records to a state where they do.

Independence is not a formality.

There is a limit to how much of a business's own work an auditor can do and still audit it. Where this firm keeps the books, that is disclosed and the audit position is taken accordingly rather than quietly ignored — because an opinion that would not survive being asked about is worth nothing to the person relying on it, which is usually a lender or a member and not the business itself.

It is also the reason an audit sometimes takes longer than a business expects. Testing a figure is not the same as accepting it, and the sampling exists to be capable of finding something.

General information, not advice. Whether an audit applies to you, which one, and by when, depends on your constitution, your turnover and in some cases on what you have declared. The thresholds have moved several times.

If a date is already close, say so first.

Audits have filing dates behind them, and the useful conversation starts with which date applies to you this year.

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