Non-statutory Audit

[Suze]

identify the major difficulty you could potentially face in non-statutory audit, and state how you would try to overcome it.

[KayPee]

Most companies are enjoined to have an external audit annually,but others are exempt.As such the performance of audits on companies which are not legally obliged to have an external audit( which is known as Non-statutory audits) Non-statutory audit is typified by audits of very small,owner-managed companies.

1.Where small companies are owned by the same people who manage them they attach very little importance to an independent review of their stewardship.They would not be ready to co-operate with anyone who wants such an external audit of their Financial Statements.

2.there would be limited internal controls which management can easily override.

How to overcome these problems? I'm still thinking about it...LoL

[Kelly]

A Non statutory audit, as said by Kaypee, is normally of benefit to small companies who do not have to have a staturory audit.

This is more economical for small companies: Less costly than a full audit.
The auditors will only ensure that nothing comes to light that the financial accounts have not been prepared in accordance with a regulated financial framework.

The major difficulty one could face in such an audit is that of internal control procedures being over-ridden by the owner/managers.
There would probably few and simple transactions, which I do not think would cause a problem.

I'm not sure how one would overcome the difficulties...


Suze,
I'm not quite sure of how to tackle this question???

Larger companies may also feel they wish to have a non-staturory audit, this could be and audit of the IT dept, the Tax dept, the HR dept.
What major problems could they face and how to overcome????
Assistance require in answering this qn...Please..:confused:

[Suze]

Hi all

Let us approach this question by identifying the difficulties then we will work on the solutions to overcome the problems.

[Cidado]

Maybe if the smaller companies were encouraged to follow the principles of good corporate governance, they may be able to overcome the problems they face.

Also, they could hire auditors to conduct audit reviews which are less costly and less time consuming.

What do you guys think?