Benefits of audit<\/strong><\/h3>\nIn principle, audits should be profitable and at the very least help to boost the top line, which might elevate a firm a space or two up a league table. They also provide a helpful training ground for new recruits.<\/p>\n
Ever since I started out in the profession, firms have low-balled in order to get audit work, with a hidden agenda. In fact, I\u2019m not aware of anyone who hides the fact that the reason for doing audits has been to obtain lucrative spin-off work from clients with whom the firm has built a close relationship.<\/p>\n
But\u2026.<\/p>\n
Having decided that the only real benefit from auditing is to get spin-off work, now that the government, the FRC and anyone else with a vague interest in the matter is determined to split the function of auditing from consultancy work, why on earth would any firm want to audit?<\/p>\n
If you think about it, on the assumption that, on average, each of the Big Four audits between 20 and 30 FTSE 100 companies, by doing so they are reducing their potential capacity for consultancy work by 20 to 30%.<\/p>\n
I may be missing something here, but wouldn\u2019t every major firm benefit from closing down its audit practice? By doing so they would potentially get a sudden boost to business and at the same time either cut the costs of a loss-making activity or alternatively eliminate something that requires a great deal of effort to make very little money.<\/p>\n
Where will this lead? If the powers that be at major practices see sense, they will resign from all audits. Since the next tier down doesn\u2019t have the capability to do this work, that will leave the public sector to recruit auditors and do the work instead.<\/p>\n
Given the FRC\u2019s view that private audit practices are not fit for purpose due to close connections with clients and very reasonable desire to generate additional business, that might even be a welcome outcome for all concerned.<\/p>\n<\/p><\/div>\n
\u00a0<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
As auditors come under increasing attack from the FRC and the media, our roving partner asks whether they might withdraw from the sector completely.<\/p>\n","protected":false},"author":2,"featured_media":5789,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[23],"tags":[],"_links":{"self":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3858"}],"collection":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/comments?post=3858"}],"version-history":[{"count":0,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/posts\/3858\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media\/5789"}],"wp:attachment":[{"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/media?parent=3858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/categories?post=3858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sloane.co.uk\/wp-json\/wp\/v2\/tags?post=3858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}