We took over the audit of a large pension scheme after the administrators had problems with the previous auditor’s on-site staff, who had been inexperienced and did not understand pension scheme terminology or operation, causing relations to break down.
Following an informative planning meeting with trustee directors and administrators, we put a team in place which the administrators found to be particularly knowledgeable. They asked the right questions and were able to progress the job in accordance with the mutually agreed timetable that had been set.
The audit partner attended the trustee meeting at which the Annual Report was approved, something the trustee directors had not experienced from the previous auditor and which was found to be hugely beneficial. It gave the trustee directors a greater insight into the workings of the audit, which before had been somewhat of a mystery. It also provided some comment on hot topics in the pensions industry and current issues facing the sector from an auditor’s viewpoint.
A comprehensive management letter was also provided, which made some suggestions as to the operational procedures and preparation and layout of the accounts, which the trustee directors found to be particularly useful.
An annual audit completed for one of our clients in the manufacturing sector, proved to be extremely useful in helping the firm to focus their stock holding policy.
The team completed the audit, mainly using detailed analytical review techniques, which look at trends and correlations.
The suggestions for improvement were outlined in a management letter which advised that a formal stock holding policy be implemented, and provisions be made for all lines not moving for more than 6 months. The client then completed a review of all stock lines, to determine the optimum level of stockholding, taking into account production optimisation as well as demand.
A stock holding policy was subsequently put in place, which resulted in no more than 6 months worth of any stock line being held at any time, which freed up a substantial amount of working capital.
The company are extremely happy with the results and the suggestions made by our audit team.
A fast growing family business with a turnover of nearly £15 million did not feel they were getting the most out of their audit, so decided to appoint us as their auditors. The firm had at one point admitted a degree of indifference when it came to audit, seeing it as little more than a statutory requirement with limited scope to provide real business value.
Working with the Finance Director our team were able to help identify key business risks and show how audit can take on a more central role in business planning.
One area that had undergone improvement was the operational side of the business. With a high volume, low margin business model, changes to stock holding and order handling processes now play a key role in their performance.
The firm had previously put most of their focus on sales, but the audit process has helped them examine their back office efficiency more closely.
The audit process played a crucial role in making the directors spend more time working on the business and not just in the business. Maintaining a full understanding of market conditions, business risks and potential operational improvements is now at the forefront of their thinking. Audit has gone from being treated as little more than an obligation, to become a really valuable business tool.
