Financial Audit Services

At Treetops, we provide thorough audit and assurance services to help businesses ensure the accuracy and integrity of their financial statements. Our high-quality audits offer more than just compliance with regulatory requirements; they also provide greater transparency, build trust with stakeholders, and provide actionable insights into your business performance.

What is an audit?

An internal audit is an independent assessment of financial information. It evaluates financial statements against specific criteria to form an independent assessment of their accuracy and fairness. Audits ensure businesses comply with financial reporting standards and meet the needs of external stakeholders such as shareholders, lenders, and regulatory bodies.

For companies with separated ownership (such as public companies or firms with external shareholders), this independent verification is critical in fostering trust between the business managers (directors) and the owners (shareholders).

Who needs an audit?

Businesses are legally required to conduct an independent audit if they meet two of the following criteria:

• Annual turnover of more than £10.2m

• Assets worth more than £5.1m

• More than 50 employees on average

Additionally, businesses that are part of a larger group may need an audit even if they do not meet the standalone criteria. When considering a group of companies you may assess the group on the limits above, which are usually based on consolidated accounts.

Alternatively, you may simply amalgamate the individual company accounts where intercompany transactions have not been eliminated and then use the following gross limits:

• Annual turnover of more than £12.2m

• Assets worth more than £6.1m

• More than 50 employees on average

There are exceptions to the general criteria, where your company must have a mandatory audit if it meets one of the following:

• A public limited company (PLC)

• An authorised insurance company

• Carrying out insurance market activities

• Involved in banking

• An issuer of electronic money

• A MiFID investment firm (Markets in Financial Instruments Directive)

• A UCITS management company (Undertakings for Collective Investment in Transferable Securities)

• A corporate body and its shares have been traded on a regulated market

• A funder of a master trust pension scheme

• A special register body

• A pensions or labour relations body

Even if the company does not meet either the general criteria or one of the mandatory audit requirements, an audit will need to be completed if:

• Your company’s articles of association say that you must

• At least 10% of the company’s shareholders ask for an audit

Charities

The rules regarding auditing for charities are slightly different. In the UK, charities generally need an audit if their income exceeds £1 million in a financial year. However, smaller charities with incomes between £25,000 and £1,000,000 may only need an independent examination, a less rigorous form of scrutiny that still provides essential assurance to donors and the public.

Larger charities, with gross assets exceeding £3.26 million and income over £250,000, will require a full audit, even if their income falls below £1 million.

(Please note that these are the general rules. Your charity’s governing body documents might have additional requirements).

What are the benefits of a financial audit?

• Meet compliance requirements
  The main reason for conducting an audit is to ensure a company complies with regulatory requirements and industry standards, reducing the likelihood of legal issues or penalties.

• Valuable operational insights
  Internal audits grant insights into business functions and systems, which can highlight process improvements and uncover opportunities to enhance profitability. This greater insight helps management make informed decisions to drive the business forward.

• Improved internal controls
  Financial audits help identify weaknesses in a company’s internal controls, ensuring that processes are more effective and risk is minimised.

• Fraud prevention and detection
  Regular internal audits can detect and prevent fraudulent activities by evaluating internal controls and ensuring adherence to policies.

• Building trust with the public and stakeholders
  Audits safeguard the public interest by ensuring that companies are presenting their financial position fairly and transparently. They also help businesses build trust with key stakeholders, including customers, investors, and lenders.

The Audit Process at Treetops

Our approach to auditing is proactive and designed to minimise disruption to your business.

Our process includes:

• Risk assessment and identification of key focus areas

• Review of internal controls and processes

• Detailed examination of financial statements

• Continuous updates on any regulatory changes that might affect your business

• Collaboration with your existing accountant, if necessary, to ensure a seamless and efficient audit

Partnering with your existing accountant

If your company is obliged to have an audit and your existing accountant cannot help, don’t be disheartened; Treetops can help. We can partner with your accountant, allowing them to continue advising you, prepare your year-end financial statements, deal with Corporation Tax, etc. We will work as a team to deliver the audit, causing you as little disruption as possible.