Let Burgis and Bullock Auditors transform your audit process
Your Audit does not have to be a burden or drain on your resources
Although many business owners traditionally view the audit as an unwelcome burden, an unnecessary drain of time and resources, we don’t. Work with the audit team at Burgis & Bullock and together we will transform your audit process for you. Instead of a burden, it can become an incredibly beneficial process acting as a vital health check for Company Directors as well as highlighting areas of improvement in business processes.
Your audit can improve your external image and more
The audit of your annual statutory accounts is a great opportunity to enhance the external image of your organisation. At Burgis & Bullock, we believe a well-prepared report and financial statements will have a considerable positive impact on the perception of investors, potential finance sources, customers, prospects, referral sources, and potentially your own staff. All of which combined can greatly improve your business prospects for the future.
Your audit, your requirements, your call
Few of us would disagree that times are changing, and fast! That’s why, even for our regular year on year customers, we approach every audit differently and ensure it’s entirely tailored to our clients’ objectives, ensuring it delivers the statutory requirement and significant real value to the business. Burgis & Bullock has unique experience for a firm of our size and location. With clients in so many different industry and business sectors you can instruct our team knowing that you are choosing a firm with significant expertise and understanding of your business needs.
Registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk for the UK and www.cro.ie/auditors for Ireland under reference C005388727.
Details of Audit Regulations and guidance can be found at www.icaew.com/auditnews and the International Standards on Auditing (UK and Ireland) can be found at www.frc.org.uk/apb/publications/isa.cfm As members of the Institute of Chartered Accountants in England and Wales we are governed by the Institute Code of Ethics which can be found atwww.icaew.com/regulations. For audits we are also required to comply with APB Ethical Standards which can be found at www.frc.org.uk.
How will FRS 102 affect your business?
Where do I start? There are some headlining differences but the longer you spend looking at it the more subtle differences you notice.
The implementation of FRS 102 is mandatory for periods commencing 1st January 2015 which may seem a long way away but it means that if you have a year-end of 31st December 2015 you will typically have a transition date of 1st January 2014. Many organisations have already started the transition.
Commentators have said that the current changes to report are the biggest they have seen so what is all of the fuss about?
The first most obvious difference is the way the accounts will look. The Profit & Loss Account and Balance Sheet will disappear being replaced by an Income Statement and Statement of Financial Position. Turnover will become Revenue, Stock will be Inventory and Debtor Receivables. Whole sections of the accounts that we are used to seeing with either move, change of disappear completely.
You may well have seen some headlines in the financial press about the big differences but you may be forgiven for thinking that some of them won’t affect you. Things like:
- Fixed asset revaluations will go through the Profit & Loss account,
- Splitting the accounting treatment for mixed use properties,
- Goodwill will become a balancing figure in our assessment of intangible assets arising on acquisition and the time permitted to write off the goodwill over no more than 5 years,
- Some leases currently defined as operating leases may well become finance leases and have to appear on your balance sheet and this could include property leases.
- Holiday pay accruals will be making a big come back,
- Financial instruments will need to be accounted for and they will include trade debtors and creditors, shares in other companies including subsidiaries and intercompany balances,
- The considerable impact of the above changes on tax and deferred tax this year and in previous years.
The transition is not something that can be done in a hurry. Companies need to anticipate both the time and cost involved. For a company with a year-end of 31st December 2015 a transition of the 2015 financial statements needs to be carried out as well and to restate the comparative year 2014 you will need to consider the year before that, 2013, in order to calculate the Statement of Cash Flows and opening reserves. There are choices to make in deciding which accounting policies to adopt but also which of the 17 exemptions to take. This is further complicated by the fact that a different combination may lead to a different tax impact. Some of these changes will need amendments to accounting systems as well as information that should be collected now.
The problem is not reduced for small companies. It is estimated that 1.5 million small companies will adopt FRS 102 with a further 1.5 million adopting the new FRSME. It won’t be an easy decision as you almost have to make the change to see whether it will be beneficial.
It is important that all companies regardless of size have a project plan to address the introduction of the new fact of accounting standards and changes to company sizes that are on the horizon. You will undoubtedly need to prioritise as some decisions are more critical than others. Time should be allocated to the systems changes and transition itself but also to consideration of the impact on things like taxation, performance related pay and bonuses, distributable profits and banking covenants.
At Burgis & Bullock, our specialist team of accounting and tax specialists can help you to understand the implications of FRS 102. For further information and advice, contact your usual B&B partner or a member of the audit or tax team. Tel: 0845 177 5500, Email: email@example.com