An audit is predicated on the assumption that the directors are doing their job in ensuring that the company is keeping proper books of account. Although audits may well uncover instances of false accounting, fraud or malpractice, they are usually undertaken on the explicit understanding that they are not designed for that purpose and should not be relied upon as such
Why not just put yourself forward as a director. As to your query I don't believe there is a right but I could be wrong on that. From the webSo if the directors are checking the books, then is there any need for an audit? I'm only thinking here of small straightforward developments so quite straightforward accounts.
Further question; is a member of a management company who's not a director entitled to view the books?
To be fair that's just auditors limiting their liability, in the scenario outlined you will have a very simple set of accounts with two bank accounts and money in and payments out, it's essentially a bank rec, if you are paying for an audit you can be fairly sure that everything is in order if they report no issues.An audit is predicated on the assumption that the directors are doing their job in ensuring that the company is keeping proper books of account. Although audits may well uncover instances of false accounting, fraud or malpractice, they are usually undertaken on the explicit understanding that they are not designed for that purpose and should not be relied upon as such
Auditors don't work for free, so if you commission an audit of course you'll be paying for it. If you fail to read properly the sections of the auditors report detailing the respective responsibilities on one hand, of the directors and on the other, of the auditor, that's your problem.To be fair that's just auditors limiting their liability, in the scenario outlined you will have a very simple set of accounts with two bank accounts and money in and payments out, it's essentially a bank rec, if you are paying for an audit you can be fairly sure that everything is in order if they report no issues.
Fair point, if one party has control of approving invoices and paying them then fraud becomes quite easy.The audit is just to ascertain/confirm that the accounts represent a true and fair view and are free from material misstatement.
If the management agent is scamming the company and the expenses are inflated or bogus, the audit won’t show that up.
The Directors need to take control of signing-off on expenses and sense-checking them. Otherwise, it’s ‘garbage in, garbage out’ in terms of the accounts.
The management agent scam is clear and was rife. Use connected companies to bill way more for simple stuff. I was a Director of one once and we switched things to three quotes and gave the agents the bullet.
That’s a bigger issue.
Why not just put yourself forward as a director.
I wouldn't have too much faith in that. What is stopping the OMC or Agent from employing a builder to do "extensive" work and just having entries in the accounts such as "building work - Joe Bloggs Builders -35k" every few months. It seems the auditor is pretty ok with this level of detail, and so are the OMC and Agent, but ordinary members are just sounded out when they ask questions.I presume accounts are audited and that's generally sufficient assurance for most people.
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