Private Audit quote required

Discussion in 'Accounting & Tax' started by MelbourneInvester, 5th Nov, 2016.

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  1. MelbourneInvester

    MelbourneInvester Active Member

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    Hi I would like to find out what the hourly cost range or what a flat fee would cost me for someone to conduct an audit and provide me with an audit report on a new small pty ltd company’s 12 months worth of financials for the year ending 2016.

    I’m looking for a very thorough audit that has the auditor investigating all the online company datafile transactions to ensure all the financial transactions have been allocated correctly and all gst refunds and payments reconcile for each quarter to what has been lodged, as well as confirming for me in the audit findings report, all transactions in myob data file match up correctly with all transactions in the physical bank statement for the period.

    I want to see both the good news and the bad news if any, so I need an idea of what the hourly cost range or what a flat fee would cost me for an audit.
     
  2. Ross Forrester

    Ross Forrester Well-Known Member

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    It sounds like you are wanting a review instead of an audit. An audit by a registered company auditor will cost more and is typically done by small companies if you are trying to attract investors as you will have certification the account are true. And in that case you should look to a large firm that adds credibility.
     
  3. MelbourneInvester

    MelbourneInvester Active Member

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    Hey thank you Ross, how much would I need to budget to have a "review" done please?
     
  4. Ouchmyknees

    Ouchmyknees Well-Known Member

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    If the purpose is not to attract potential investors but for your own peace of mind, see if your accountant has been doing his/her job etc, (by your description it looks like this way) any accounting firm can do it.
    Most financial audits are done by sample testing rather than review all transactions. Say if you have 1000 sales in a year then depends on how good your internal control is, maybe only 50 is checked. Of course it is more complex than this as it involves risk analysis etc but that's the general idea.
    But given you want to have every transaction reviewed it is going to be potentially very costly depends on your business activities.
    Cost wise you probably looking at a few hundreds per hour, talk to a firm and they can give you a quote. The cheaper way is to find a good accountant you trust who is independent from your current accountant to review your books, but in this case a report won't be issued to you.
    Best of luck.
     
  5. Ross Forrester

    Ross Forrester Well-Known Member

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    G'day mate - if you are in Melbourne and you want a registered company auditor talk to Craig Silvester at www.cfmc.com.au - they are our allied office over there

    Otherwise if you just want a general once over chat most suburban firms will talk about your concerns for the first hour for free. And I really encourage you to have an accountant who can look you in the eye and direct you honestly - I am not sure if I can do that from the other side of the country.

    Only get an audit if you need it for attracting investors as they are expensive due to the liability issues for the auditor.
     
  6. MelbourneInvester

    MelbourneInvester Active Member

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    Thanks, roughly how much $ per hour should I budget presuming there was say 10 hours worth of work required?
     
  7. MelbourneInvester

    MelbourneInvester Active Member

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    Thanks, roughly how much $ per hour should I budget presuming there was say 10 hours worth of work required?
     
  8. Ross Forrester

    Ross Forrester Well-Known Member

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    No idea. The firms all have different approaches and processes. The time will vary considerably but the net outcome will be the same.

    I think you will be better off just having a chat to another guy and getting a second opinion.
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I would think $200 to $300 ish per hour. Just a wild guess though
     
  10. Greyghost

    Greyghost Well-Known Member

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    What is the purpose of the audit? What are you looking to achieve from it?
    Ben Affleck the accountant may do it for you.. lol
     
  11. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    1. The Directors of the Company will determine if the entity is to be audited and the manner in which it prepares its financial report may be determined by them and the impact of Corporations Law;
    2. The auditor is merely reporting that the statement represent a true and fair view. Its not a compliance test or an assurance of 100%. An audit may detect fraud or error but unless the scope defines that it isnt purpose then testing and sampling may assist the auditor to reduce the depth of review across a range of issues etc. A special purpose audit would be very expensive. I had to perform one for a major insurer to identify the scope of fraud committed by a manager. The cost rang to $150,000+ at a point when we were able to conclude the value of the estimated fraud and its duration. It was still an estimate.
    3. The company shareholders may be empowered by Corporations Law or the Constitution, or both, to request a audit that the Directors must comply with. The choice of auditor is theirs. Typically a "registered company auditor" is the only requirement.

    There can be severe limitations with requesting a audit after the year has ended. The accounting systems may not be sufficient to assist the auditor to identify that all transactions are complete for example where cash is involved or to identify the existence and value of stock on hand. These days MYOB uses datafeeds from statements and unless these are manipulated then all trasactions would be complete. Then non-bank transactions must be allowed for. Testing 100% of entries to primary records an be done but would be tedious and costly. At the end of the day the auditor opinion about allocation may be "immaterial" if it does not mis-state profit eg accounting costs are listed as consulting costs. I would think mistatement error would be easy to detect and the highest risks are omission or poor policy (eg not accruing costs, income etc). Most non-audit financials are prepared on a cash basis which makes a very poor process for audit. If the underlying accounting policy is wrong the reports will still be correct - But wrong.

    For turnover under $2m I would expect $30,000 in costs.
     
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