The value of the audit
Much of this week has been spent preparing for next week’s visit by the auditors – a chance to re-examine how we do things and how we categorise expenses.
This afternoon the draft accounts were presented to the Board and spent much of the time getting them to focus on the bigger picture, and not why advertising costs were up 4%.
I agree it’s important to look after the pennies, but today there were bigger fish to fry. How we account for foreign exchange transactions, reviewing the bad debt provision, considering the need for the property dilaps provision etc.
We got there in the end and now it’s back to finalising the audit file and getting all the tax analysis schedules together.
It’s also made me think about the value of the audit – how we as a business can gain more than just a signature on an audit report by using the audit process as a way of improving how we do things – e.g. do we really need to keep a separate file of copy invoices for fixed asset additions when our accounts system already contains sufficient narrative on each item to allow proper review, and the original invoices are on hand in any case.
Last week’s base rate decision passed by without much comment – not really the positive signal that we need. Interesting however to read the comments of one of the MPC members yesterday though saying that there’s a real danger in not reducing rates soon – perhaps next month, although August is not a typical month for bold decisions.
