Designed to ensure annual accounts give a "true and fair view" of the state of affairs within an organisation, an audit is an official inspection of financial accounts by an independent and accredited outsider.
The auditor's responsibilities include the provision of "reasonable assurance" that the financial information provided is free from material misstatements, whether due to fraud or error. Accountants are usually quick to point out that while reasonable assurance is a high threshold, it is not a guarantee that an audit will always detect omissions or irregularities.
All publicly-listed companies and the majority of private limited companies in the UK are required to have an external audit of their annual accounts. In general, private organisations are required to do so if they meet two of the following three criteria: an annual turnover in excess of £10.2 million; total assets in excess of £5.1m; or if they employ more than 50 people.
READ MORE: Alex Neil urges Humza Yousaf to use forensic accountants for SNP cash
According to the last set of accounts published by the SNP in August 2022, the central party which does not include the Westminster Parliament group had total income of £4.5m during the 12 months to December 31, 2021. Total fixed assets stood at £856,348, and there were a total of 27 employees.
Some organisations that are not legally required to be audited choose to do so anyway, usually to satisfy their own stakeholders and ensure they are in accordance with regulations. However, the UK agency in charge of election finances has a different set of rules for political parties.
The Electoral Commission states that all party treasurers are responsible for compliance with financial controls set out under the Political Parties Elections and Referendums Act 2000 (PPERA). Those who fail to comply put themselves and their party at risk of civil or criminal sanctions.
READ MORE: SNP finance woes deepen as auditors leave party's Westminster group
The Electoral Commission dictates that parties with annual income or expenditure of more than £250,000 must file their accounts with the commission within six months and seven days of the end of their financial year. For the SNP's year-end on December 31, this translates to a deadline of July 7 in the following year.
All accounts from parties in the £250,000-plus category must be accompanied by an independent auditor's certificate.
Audits for UK companies are typically scheduled for three months from beginning to end. This generally includes four weeks of planning; four weeks of "field work" to verify things such as the physical existence of assets that are listed on paper; and four weeks for compiling the report.
READ MORE: SNP hid resignation of auditors for six months, Humza Yousaf reveals
There are a variety of reasons why an organisation and its auditor will part ways, which could include the inability to agree a fee or a conflict of interest. Some companies have a policy of appointing new auditors after the incumbent has been in place for a set number of years.
Auditors may also choose to leave due to a lack of cooperation from their client, such as withholding information that could have a material impact on the organisation's accounts. Reputational impact can also come into play.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel