Auditors in the United Kingdom
A quick read of the intriguing and demanding world of auditors in the UK from 3E Accounting.
The world of audit, like everything else globally, is undergoing revolutionary change spearheaded by technology. Long gone are the days when clerks laboriously wrote in the debit credit columns of a ledger. The world of finance is now a complex and technology-driven arena that yields powerful insights into commerce. Data analytics, blockchain and machine learning are just some of the technology bringing in change. Keeping up with the changes, auditors in the UK are leveraging tools and knowledge to ensure an impeccable level of audit.
The role of auditors as financial gatekeepers remains as crucial and necessary as ever. Auditors are specialised accounting and financial experts whose primary function is to scrutinise accounts and financial statements. This is done with a view to ensuring the accuracy, representation, legality, and validity of the records.
The shift from rudimentary to a more modern audit function occurred during the 19th century. It was mainly spurred by the Industrial Revolution of England. As trade expanded, transactions became more complex. It became more viable for solo traders to form partnerships and enterprises. This soon led to the concept of joint-stock companies which needed a better accounting system.
In 1880, the Institute of Chartered Accountants in England was incorporated by Royal Charter. The Institute’s primary purpose was to educate and prepare auditors. The British Association of Accountants and Auditors was set up in 1923, and it saw the rise of the professional auditor. Currently, in the United Kingdom, all auditors and audit firms are regulated by the Financial Reporting Council or FRC. The Register of Statutory Auditors has information on the UK’s Statutory Auditors and Audit Firms.
The purpose of an audit is to review financial statements to ensure they provide a fair and true view of the records. Audits can include a review of a company’s operations, risk management as well as systems performance and security. There are also statutory and non-statutory audits, forensic audits, group or consolidated audit, tax audits and VAT inspection audits.
Auditors can be internal or external auditors. Whilst each performs a separate function, all auditors are required to be objective and independent. Hence, both are distinct yet complementary to each other as they promote efficient governance and compliance. Internal auditors review their organisation’s financial statements, risk, governance, etc. They are usually employees of the company itself. External auditors come from outside the organisation. They focus more on accounting and financial statements as well as regulations, where applicable.
Auditors need the following qualifications in order to be allowed to audit a business:
- External Auditors: must qualify as chartered accountants from the Association of International Accountants (AIA), Association of Chartered Certified Accountants (ACCA) and Institute of Chartered Accountants in England and Wales (ICAEW).
- Internal Auditors: a bachelor’s degree in business, accounting or finance along with three to five years of industry experience. Certifications include Certified Internal Auditor (CIA) or Certified Public Accountant (CPA).
If you are looking for audit services or auditors in the UK, 3E Accounting offers exceptional service for the discerning entrepreneur. Along with our international affiliates and partners, we provide multidisciplinary expertise par excellence. Whether to identify gaps in your operations, increase shareholder confidence, or prepare for audit scrutiny, we’ve got you covered. Contact 3E Accounting today for a bespoke suite of solutions created uniquely just for your business.