Getting an Irish company audited in India to save on audit fees

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ciarank

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Hi,

I have a small business but my company audit costs are in the region of 10k each year. As all my bookeeping and quarterly accounts are done in house by myself and trainee accountants they are pretty straight forward to audit at the year end.

My question is: Is it possible to outsource this audit work to a firm in India to get audited? Would this be acceptable in Ireland and by the Revenue Commissioners etc?

The cost savings would be very substantial especially in the long term. Any help or suggestions would be much appreciated.


Ciaran
 
Re: Getting Accounts Audited in India

Are banks, grant agencies and other users of audited accounts likely to accept audit reports from an Indian auditor? How will you or they have recourse against an Indian auditor in case of problems arising?

As an alternative, can you perhaps avail of Audit Exemption?
 
Re: Getting Accounts Audited in India

At the following link select Information leaflet No. 10. This is primarily on audit exemption in Ireland, however It also lists, on page 25 those bodies whose members are entitled to audit company accounts in Ireland.

http://www.cro.ie/en/downloads-information-leaflets.aspx

As Ubiquitous has suggested above, the audit exempt route, if you meet the qualifications for same, would be the simplest solution. If you do not qualify for audit exemption then perhaps you could see if alternative audit firms would do the work for a fee more suitable to your budget. As has been said here many times on other threads, shop around.
 
Re: Getting Accounts Audited in India

Many thanks to both of you for your help and suggestions. However I should have mentioned that I cannot avail of audit exemption because I have 2 companies linked to each other (don't know the technical term). I do intent untwangling these companies at some stage down the road which will then give me audit exemption but for now I have to proceed with the audit.

You made a very good point Ubiguitous about the banks etc and one that I had considered. But I would be happy on that front once it is all legally acceptable.

I don't actually know which association could tell me this, is it the CRO or the ICAI (Irish Chartered Accountants of Ireland)?

Thanks again for you help it is much appreciated.


Ciaran
 
Re: Getting Accounts Audited in India


I know this is an easy and possibly simplistic point, but you really should try to restructure your business (if at all possible) to ensure that you can qualify for audit exemption.

The CRO or any of the accountancy Institutes should be able to advise you on who can and cannot do audit work but I would be amazed if any firm in India would be sufficiently expert on the Irish regulatory framework to permit them to practise audits here.
 
Re: Getting Accounts Audited in India

Yes this is the last year in which the companies will be tied and it was done for tax reasons a couple of years ago, a bit complicated but was well worth doing.

Like you I have my doubts too about getting a company audited in India but I wanted to explore this option thoroughly as it can potentially save alot of money not just for this year but for the years ahead too.

Thanks again
 
Re: Getting Accounts Audited in India

Have a look at the Audit Exemption document referred to by Graham

First, the auditor would have to be a member of one of the following bodies:

(1) ACCOUNTANCY BODIES
Institute of Chartered Accountants of Scotland (ICAS)
Institute of Chartered Accountants in England and Wales (ICAEW)
Institute of Certified Public Accountants in Ireland (ICPAI)
The Association of Chartered Certified Accountants (ACCA)
Institute of Chartered Accountants in Ireland (ICAI)
Institute of Incorporated Public Accountants (IIPA)

Then they would have to be authorised by their institute to carry out audits. I don't think any auditor would conduct an audit without visiting the site, so I suspect that in the very unlikely event that a member of one of the above institutes who is registered as an auditor, would be prepared to do an audit, you would have to pay their travel expenses to do the audit.

Brendan
 
Brendan,

I think the OP is in Ireland but is looking at getting an audit firm in India to do the work. Not that the company is in India looking at an Irish auditor. However I would expect what you said to apply equally in that reverse situation anyway.

Graham
 
Last edited:
That seems a pretty irrational response to your audit fee.

Why don't you find out why your fee is 10000. Auditing firms charge by the hour. Get a breakdown of the fee .
At 10000 you could say an accountant wilth a charge out rate of 100/hr is spending 100 hours on your audit
If you have a good audit file prepared with accounts ,bank statements,receipts,invoices etc then this is crazy.
Mostly the detailed checking work on an audit is done by an trainee accountant and an experienced accountant then gets to charge 2 or 3 hours for a review ,meeting client etc,so I would not expect the trainee to be charged out at 100/hr
 
Audit fees have gone through the roof because of the volume of work to be carried out (eg the ICAI standard Procedures for Quality Audits work programme runs to 106 pages of checklists), the rigour with which the conduct of the work is policed by regulators, and the risk of being sued, or sanctioned by regulators (including the possibility of criminal prosecution), or both, if anything goes wrong and the auditor is found not to have complied to the letter with all their obligations as auditor. Many accounting firms are now reluctant to take on any audit work. Most do so only on a limited basis, eg for existing clients and/or where they have strong confidence in the client's ability to comply with accounting, tax and other regulatory requirements. Some refuse all audit work point blank.

In general, for accounting firms audit work is far less profitable than other work in accounts compilation, tax etc unless they are charging premium audit fees. For this reason, many firms have moved away from hourly billing for audit work.

The days when an inexperienced trainee could compile an audit file and an experienced accountant could review it and sign the report in 2 or 3 hours are long gone.

You will not get many people working on audit files nowadays whose work is being charged at much less than €100 per hour.

This is why I suggested to the OP that they should try at all costs to achieve audit exemption.
 
Graham_07 said:
,

I think the OP is in Ireland but is looking at getting an audit firm in India to do the work. Not that the company is in India looking at an Irish auditor. However I would expect what you said to apply equally in that reverse situation anyway.
Click to expand...

Yes, I understand that. What I am showing is that to have an Irish registered company audited, it must be by a member of an Irish accountancy body who is registered as an auditor by their body. So theoretically, such a person could exist in India, but they would have to travel to Ireland to do the audit.

Much better to get audit exemption as Ubi suggests.

Brendan
 
Thanks again to everyones response it is very useful information.

I should have mentioned from the outset that my audit fee is hugely excessive for the work carried out and it in actual fact includes all the surrounding add on work such as VAT, PAYE, & Corporation Tax returns along with my own personal returns. Also advice during the year and cert letters etc etc.

Furthermore there are huge volumes of transactions given the nature of my business (convenience stores). There is alot of work ivolved and there is no doubt about that as we do the books ourselves.

Thats not to say that there are not firms out there that would discount this figure alot but I'm definitely not paying hugely over the odds for sure. What I was just exploring was was the possibility of getting the audits done at a fraction of the price in India by means of shipping it over there and outsourcing per se. But it is clear to me now that this would not be a viable option as they would have to be registered to the above mentioned accountancy bodies and would possibly have to visit the premises.

I just had to the question and thanks to everyone who answered. I will be pushing for a lower fee too otherwise I'll be moving to a cheaper firm as I have to continue to shave costs.

Thanks again.

Ciaran

P.S.- I will be availing of audit exemption from next year onwards as the 2 companies will be seperate then.
 
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