Sceptics challenge need for ‘mini-audits’

Sceptics challenge need for 'mini-audits'

The ICAEW’s plan to introduce a 'mini-audit' service for clients under the audit threshold has been met with some reservations

ICAS and ACCA, never the institute’s most enthusiastic supporters, have given
the strategy the thumbs down, as have other key opinion formers.

Peter Mitchell, whose organisation – the Society of Professional Accountants
– has also been critical. ‘If there’s a need for more than the accounts, nothing
else is required but a full audit,’ says Mitchell.

‘If the new assurance service is used infrequently, why introduce it? Perhaps
the ICAEW is using members’ fees for something we’ve said we don’t want,’
Mitchell said.

Criticism from other institutes is not necessarily a bad thing for the ICAEW,
of course. It means the institute will get no competition. Criticism from
Mitchell is more damaging, though.

But the plan has its defenders. Peter Upton, a former ICAEW council member
who operates his own firm in Maidenhead, has trialled the service for the last
12 months and strongly advocates what it offers.

He sees the assurance service as adding value to what an accountant can offer
a client – essentially a gap filler for those requiring more assurance than that
given with a basic compilation report and those that are not convinced they
require the whole hog – a full audit.

Upton says that those against the plan have highlighted that practitioners
often provide further assurance for third parties, usually lenders, dealing with
their clients. ‘If that’s the case why not have a certificate that says as
much?’ argues Upton.

‘With a certificate that better describes what work you’ve done, it’s easier
to charge for it. My personal view is that the other bodies are likely to copy
it.’

While Mitchell and others expect the scheme to prove underused, it will not
fade away in the near future. The ICAEW, admitting that the topic requires
deeper discussion, has opened a consultation to gain feedback on the service it
is offering, with a view to spending the next two years ‘refining’ the offering.

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