Voluntary audit

An initiative audit is commissioned by the owner or the management when an objective picture is needed. A statutory audit confirms the statements for an outside user – a bank, a regulator, a publication. An initiative audit answers your questions, and to exactly the extent you set.

Who orders one, and why

• the owner – before changing accountant or finance director, to fix the state of affairs on the handover date;
• an investor or the buyer of a stake – to know what is being bought, risks included;
• the founders – to see how rationally the money was used over a period;
• the director – ahead of borrowing, a tender or a grant programme;
• a company that has grown – where the books were kept out of habit and the scale is now different.

What the review covers

The scope is agreed at the start – that is the point of an initiative audit. Typically it covers whether the accounting meets the requirements of the law; the reliability of the figures in the financial statements; the state of the source documents and of the document flow; the accounting policy and whether it is actually followed; the settings of the accounting software – which is where most systemic errors live; and the tax side, where that falls within scope.

Separately we look at what is not formally an error but creates exposure: settlements without contracts, receivables that have stopped moving, balances that no stocktake supports.

What the client gets

A report of facts, not of impressions. Every observation cites a document and a rule, carries its consequence in money where that can be counted, and comes with a specific recommendation. Systemic errors – the ones that recur – are set out in a block of their own: they are cheaper to remove once at the level of the process than to correct every month.

How the work runs

First we establish which decision the result is for: that sets the depth. Then a sample of transactions and work with the documents and the ledger. Questions go to you as they arise rather than accumulating until the report, so you see the picture sooner. At the end, the report and a conversation about it: without discussion a document rarely turns into action.

What the fee depends on

Scope follows the period, the number of transactions, how many areas are under review and the state of the documents. A narrow task – looking at a single area before an accountant leaves – costs considerably less than a full diagnostic. Scope and fee are fixed in the contract before work begins.

Common questions

Is this a formal auditor’s opinion?

An initiative review is carried out to the scope agreed with you, and its result is a report for internal use. If what you need is an opinion for an outside user, say so at the start: the requirements on the work are different.

Will our accounting department stop while the review runs?

No. We work from copies of documents and exports from the ledger, and put questions in batches.

Who sees the result?

Only the client. The confidentiality term is in the contract.

Will you help fix what is found?

Yes – from point corrections through to rebuilding an area of the books, and where it makes sense the full service. That is separate work, and we state its scope after the report.