Beginner’s Guide on Starting an Audit Firm in the United Kingdom
As commerce restarts with a firmer footing on the economy pedal, a vast opportunity arises for specialists such as auditors. More and more businesses, especially start-ups, will need the services of a reliable audit firm for ensuring both safeguards and compliance. Insights on starting an audit firm business in the UK emphasize the need for good corporate governance and transparency.
Get your ledgers in order with 3E Accounting before starting an audit firm business in the UK.
Auditing for Success- Knowing the Industry Practices
An audit is a professional investigation of the financial and operational aspects of a company. For example, financial audits ascertain if the statements show an accurate and fair view and meet accounting standards. However, audits are no longer confined to doing company accounts. They now encompass a wide variety of scrutiny, including:
- Statutory and non-statutory audit
- A forensic and investigative audit
- Financial and operational audit
- Infosys and IT audit
- Tax audit
Audits can be done in-house (internal audits) or outsourced (external audits). External auditors need to be qualified, chartered accountants.
The FRC or Financial Reporting Council currently regulates auditors in the UK. However, the FRC will be replaced by the Audit, Reporting, and Governance Authority (ARGA) shortly.
Business Registration Process for Starting an Audit Business
For starting an audit firm, you need to go through the usual company formation process. You first need to select a unique business name and register for a taxation number. You can then start drafting a business plan which will help you define business objectives, know the capital requirement, the process of generating leads, generating profit over a year, and many more.
It is also essential for you to choose the proper company structure such as Sole proprietorship, partnership, limited liability partnership (LLP), or limited company. Usually, audit firms are incorporated as an LLP, as it offers the benefits of a partnership couple with limited liability.
A corporate service provider will take care of the complete business registration process while you focus on primary tasks.
Licences and Permissions Needed
It is a legal requirement for all accountancy and audit businesses to be registered with the relevant authority in the UK. These supervisory bodies include:
The Institute of Chartered Accountants in England and Wales (ICAEW)
The Association of Chartered Certified Accountants (ACCA)
The Chartered Institute of Management Accountants (CIMA)
Work with a corporate service provider who can help you with getting the licences and also with company incorporation services.
According to the UK Government website, at least one person in your firm must be a qualified auditor. Your firm will also need professional indemnity insurance to register. The supervisory body that you register with may also require you to display your registration number.
You will also need to inform and register with HMRC for your taxes and handle your clients’ accounts. For the latter, HMRC will issue your firm the relevant reference number for authorization. Further, as you will be handling sensitive client information, you may need to register under the Data Protection Act 1998.
Any compliance requirement on starting up an audit firm business in the UK should not be taken lightly. The rules are strict, and authorities can close down even specialist businesses such as audit firms.
3E Accounting provides the right guide to company registration ensuring the company is legally compliant.
3E Accounting works with you to ensure your business gets off to a great start. Our fully digitalized and customizable company incorporation services provide innovative solutions for the discerning entrepreneur. All our partners and affiliates are board-approved experts with the required regional expertise to ensure a seamless experience. Contact us today to check out our comprehensive and end-to-end range of company formation and regulatory solutions.