Plans to take more businesses out of the audit regime gives practices the jitters, says CaseWare
A QUARTER of accountants are unsure how audit threshold changes will affect their business, according to a new survey.
With audit thresholds set to rise next year and removing another tranche of business from the compliance regime, 28% of advisers are uncertain about how this will affect them and their clients, according to CaseWare’s interviews with 50 of the top 100 practices.
More than half (53%) expect to see their revenues fall, while 37% think they will be unaffected as far as fee income is concerned.
Despite the concerns, accountants are working through the issue. Some 48% believe they are well prepared.
One in ten of mid-tier firms expect half of their clients to be affected by the change, while 40% of them see a quarter likely to be affected.
A quarter of respondents expect half their clients to want to ditch the annual audit, when possible.
Simon Warren, Managing Director at CaseWare, said that while many lenders and regulators will still require an ‘audit’ to be undertaken of clients, firms will have to consider their processes, and approach to the work. More thought, and action, will be required to replace revenues if clients ditch audit altogether.
“Many accountants in the mid-tier sector expect that significant numbers of clients will be affected and they believe that many of them will stop having audits,” said Warren.
“If those firms decide against audits, then accountants are going to need to find ways of clawing back their lost revenue from other sources and start offering alternative services to their clients.”