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Audit warning issued

LARGE proprietary companies have been advised to check whether they need to have their accounts audited.

Companies that meet any two of the following three criteria need to lodge audited financial statements: assets greater than $5 million, revenue greater than $10 million, or 50 full-time equivalent employees.

BDO Chartered Accountants & Advisers managing partner Geoff Brayshaw said he believed owners and managers of growing businesses might not realise they have reached the ‘large’ size threshold.

“These businesses need to start putting in place a strict timeline that will allow for the completion of the audit by the end of October,” Mr Brayshaw said.

He urged business owners and managers to think about audits as more than a compliance task.

“Audit work should not be viewed as a compliance dinosaur but rather a mechanism that assists owners of growing businesses who rely on sound internal control procedures to deal with emerging issues,” he said.

Mr Brayshaw said there were several areas where an audit could deliver value-added benefits.

These include providing reports on internal control procedures in areas such as sales, purchase, wages and inventory and reviewing computer systems to address issues such as business continuity and disaster recovery plans.

He said an audit would also enhance the credibility of financial statements, helping with a trade sale or initial public offering.

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