Vendor forced out of audit market

Auditing software company AuditPlus has been forced out of the market due to
falling audit thresholds and increased legislation, leaving practitioners with
less choice.

AuditPlus, which had provided auditing software to accounting practitioners
since the early 1990s, supplied support until practitioners began to work on 31
December year ends.

The software provider said its decision was based on the complexity of
managing new international standards on auditing, and a drop in the audit
threshold that had shrunk the market.

Even Iris, one of the biggest suppliers of software to accountants in the UK,
admitted that the latest version of its audit software was now mainly used by
larger accounting clients.

‘Every time the audit threshold moves, we see slightly less interest,’ said
Iris group development director Simon Turner.

Turner said that the company was ‘totally committed’ to its audit software,
and had just released the latest version including ISA reports and forms.

He added that software houses producing audit software as a part of accounts
production should look to create more efficiencies in the data exchange process,
accountants moved towards a ‘paperless audit trail’.

‘This is our intention, due to requests from accountants for more speed and
accuracy of data.’

Mark Holland (right), head of Baker Tilly’s IT and advisory group, and an
ICAEW IT faculty member, bemoaned the adverse effect increasingly complex
compliance has on smaller software houses. ‘Changes in legislation, and its rate
of change, will eventually squeeze smaller software houses out,’ he said.

It had been predicted that the raising of the audit threshold in 2004, from
£1m to £5.6m, would take 69,000 companies out of the mandatory audit market.
However, credit information business Graydon estimated the figure to be nearer
But it’s not all bad for accounting practitioner software companies.

Jonathan Russell, partner at Oxford-based firm Critchleys, and new president
of the UK200Group, said he believed the move away from audit clients was an
opportunity for accountants to provide more business advice.

He highlighted the provision of bureau services as a key area of growth for
practitioners ­ a market sector covered by a host of payroll software providers,
including Moneysoft, Iris, Sage and Digita.

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