An audit is among the toughest and most cumbersome responsibilities of an accountant. It is the careful evaluation of a company’s financial statements for their accuracy and authenticity which requires a great deal of knowledge, skill, and accountability on the part of an auditor.
The audit profession has undergone a massive change over the last five years. While it showed immense promise owing to technological advancements and massive demand up until 2020, the global coronavirus pandemic came as a speed breaker. Currently at the brink of a decisive moment, the audit business still offers a great deal of promise, albeit with support from experienced third-party auditors.
Audit support services have, therefore, been seeing a boom across the globe, including the UK, in the post-pandemic world. Since accountants and accountancy practices now need to spend more time focusing on value-based services, it has become imperative to delegate core functions such as an audit to a reliable outsourcing service provider.
Although accountants have harboured several misconceptions about outsourcing audit work to professionals outside their practice, it has numerous practices.
To begin with, outsourcing helps simplify your accounting audit process by transferring it to experienced professionals belonging to a third-party organisation. These professionals work with the latest technology to automate critical processes and make them error-free. Thus, with outsourcing, accountants can bring more accuracy into their audit work and facilitate capacity building and profitability for their firm.
Since audit support and preparation services have a vast scope for accountants to scale their practice, we will explore each attribute of audit outsourcing in detail on this page.
An external audit is a crucial annual process for any business organisation. Businesses often employ experienced individual accountants or leading accountancy practices to conduct this audit for their firms.
A financial audit is, however, a highly time and resource-intensive job. Therefore, accountancy practices sometimes face a crunch of experienced auditors to take up their clients’ audit jobs. Moreover, with the accountancy sector facing a global skills shortage, accountants are often left with minimum to no bandwidth to take up new audit work, thus losing out on potential revenue opportunities. This is where accounting audit support comes into the picture.
Audit support refers to the professional support and guidance provided by an outsourcing company to an accountancy firm. Outsourcing firms provide highly experienced and extensively trained audit support staff to accountants in a bid to make their cumbersome audit job hassle-free.
In simple words, audit support services refer to the comprehensive assistance an outsourcing firm provides in terms of skilled auditors so that accountants and accountancy practices never fall short of resources. It creates opportunities for practices to take up new work and attract new clients, create capacity for their firm by freeing up their internal resources, and earn significant profits.
As a part of professional audit support and preparation services, outsourced auditors conduct an end-to-end financial audit for your clients, prepare checklists and reports, communicate and follow up with the concerned stakeholders, and provide valuable advice and guidance to develop your business.
Read more: Audit Support Services – Decoding the Term for Growth-Focused Accountants
The audit industry in the UK has been undergoing an acute crisis over the last few years. A joint inquiry report by the Parliament of the United Kingdom and the Work and Pensions Committee brought to light the appalling audit failures of multinational firms such as Carillion and BHS at the hands of leading audit giants, thus creating a massive trust deficiency in the market.
Referring to the crisis, Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, UK, noted, “It is clear from the large-scale collapses like Thomas Cook, Carillion, and BHS that Britain’s audit regime needs to be modernised with a package of sensible, proportionate reforms.”
In regard to this, the UK government proposed that smaller audit firms undertake a portion of a big company audit, thus creating an enormous opportunity for accountants and practices to take up new projects.
However, since the accounting audit process involves a severe element of risk, outsourcing it to highly experienced and trained professionals is a viable solution. This way, accountants can secure new business for their practice without worrying about doing the job themselves and earning a significant profit.
With more and more small and medium-sized accountancy practices entering the audit market, the scope for audit support services UK is projected to skyrocket in the coming years.
Read more: Audit Support Services UK – Scope, Size, and Significance
The audit profession is headed towards an inevitable change. The shift in market expectations, advancements in technology, and a series of headline corporate failures have created room for the profession to evolve and grow in the upcoming years.
The global coronavirus pandemic further laid a huge impact on the audit world. The financial audit industry, once a profitable sector, saw a substantial dip in business post 2020. However, as the economy recovers and downstream market demand improves, the industry is once again ready to take off in 2022.
A 2021 market research report by IBISWorld predicts that the accounting and auditing industry is expected to see a rise in revenue by about 1.7% in 2022.
Evidently, outsourcing accounting audit support is the way forward for accountancy practices looking to scale in the next five years. This is also an ideal time for practices to step into the audit market to earn greater profits.
Here are a few indicators to help accountants make the big decision about outsourcing audit support.
The market is booming with opportunities: As mentioned above, the market is currently in favour of small and medium-sized accountancy firms entering the audit business, which means it is a good time for accountants to consider audit support services.
You want to add a profitable new service to your portfolio: Auditing is a lucrative job and can earn significant profits for an accounting firm when outsourced to a reliable audit support provider.
Scalability is one of your prime objectives: Adding a new service to your portfolio and securing new clients can pave the way for your firm to scale quickly. A dependable audit support services provider can easily facilitate this for you and help create capacity for your firm to scale.
There is no specified rule to ascertain the right time for accountancy firms to outsource their audit requirements. For growth-focused firms, 2022 is a great year to get into the audit business and create new revenue and profit streams through effective outsourcing.
Read more: When is the Right Time for Accountants to Outsource Audit Support Services?
At this stage, we know that accounting audit support has immense scope in the UK in the post-pandemic world. Getting into the audit business can be highly rewarding for accountancy practices in 2022 and the years to come. But how does outsourcing impact the growth and profits of these firms?
Like every other service or business offering, audit support and preparation services have certain pros and cons that can significantly affect a firm. Let’s look at some of these.
Experienced auditors: With trust becoming a crucial factor in successful audits, you wouldn’t want to risk your reputation by employing novice and unskilled auditors. Top firms providing audit support services UK eliminate this risk by employing highly professional and experienced auditors and training them extensively for the job.
Latest technology: A recent study by global audit firm Mazars on the future of audit revealed that technology plays a crucial role in the audit process, with 96% of respondents confirming being in favour of using new audit technologies. This can be easily achieved with accounting audit process outsourcing.
Capacity building: Outsourcing is crucial in helping accountancy firms, especially small and medium-sized practices, build capacity for their business by freeing up internal resources to focus on more critical tasks.
Enhanced profits: One of the most widely demonstrated benefits of outsourcing external audits is enhanced profitability. Offshoring audit support services in India is highly cost-effective and can help accountants save and earn big, thus fueling profits.
Also read: 4 Ways Audit Support Services Can Transform Your Practice
Potential risks: It is no secret that audits are complicated and risk intensive. The massive audit failures at UK giants Carillion, BHS, and Patisserie Valerie brought to light the enormous risk involved in the audit job and created a lack of trust in the industry. This is one of the biggest concerns of accountants currently, which can be eliminated with dedicated accounting audit support.
Communication gaps: Communication is another challenge that may come in the way of a successful audit outsourcing partnership. Although this risk can be easily avoided by partnering with a top outsourcing firm, accountants must take equal responsibility for establishing a healthy communication channel with their remote auditors to prevent confusion or miscommunication.
Tedious process of finding the right audit partner: Finding a reliable partner for dedicated audit support services UK is not easy. In a world where accountants are losing trust in audit firms, finding the right audit outsourcing partner can be a real challenge.
Each of the above challenges can be avoided if accountants are thorough with their due diligence before teaming up with an outsourcing firm. We recommend conducting careful background checks on an audit support services provider and evaluating their performance beforehand with a free trial (if available) in order to be sure about their services.
Read more: The Pros and Cons of Outsourcing Audit Support Services
Following the enormous audit failures in recent years, the way individual auditors, audit companies, and outsourcing providers function is set to change significantly. It gave birth to the Financial Reporting Council, an independent body that regulates accountants, auditors, and actuaries in the UK and Ireland. This has considerably impacted audit support services UK and altered the way audit outsourcing companies function.
Nonetheless, the core audit outsourcing process has largely remained the same. It begins with identifying the gaps and pain points in the audit process and deciding to outsource them to an accounting audit support provider.
Let’s look at the systematic process of outsourcing audit support services.
Stage 1 – Research: The first step to outsourcing your audit work is research. At this stage, accountants look for the best audit support providers in the market and shortlist a firm based on their industry experience, technical expertise, awards and accreditations, client testimonials, one-to-one interviews, and more.
Stage 2 – Candidate Selection: After you select an outsourcing partner for audit support and preparation services, the firm shares a list of available candidates for your audit work. Accountants can look at the candidate profiles and interview them to shortlist and finalise the right candidate for their firm.
Stage 3 – Contract: The next stage is creating and signing the outsourcing contract. This lays the foundation for the outsourcing association and the regulations each firm needs to follow.
Stage 4 – Onboarding: The final step in outsourcing audit support services is to onboard your offshore audit specialist or team. Ensure that you communicate with them regularly, give them honest feedback, and build a relationship with your outsourcing provider to facilitate a successful association.
Even after you have onboarded your offshore audit team, an accountant’s responsibility does not end. Make it a point to be in constant touch with your outsourcing provider and consult with them about the important audit decisions in your firm.
A healthy outsourcing partnership can sustain and thrive on the pillars of regular communication and honest feedback.
Read more: Outsourcing Audit Support Services UK: How Does it Work?
In the above section, we elaborated on the process of outsourcing accounting audit support in the UK. As mentioned, the first step in the process is to find an outsourcing provider to partner with. However, this may not be a straightforward process.
Research is key to finding the right audit support provider for your firm. There are several service providers in the market, but you are essentially looking for the one that understands your challenges and provides tailored solutions to suit your requirements.
So, if you are struggling to find the right audit support services provider for your practice or are unsure where to look for one, let us help you.
Delve into your inbox: Outsourcing companies regularly send emails and offers to potential customers but are often tagged away as spam. However, if you are actively looking for an audit support outsourcing provider, it may be a good idea to look at these emails.
Chat with peers: Although digitalisation has remarkably changed the way businesses market themselves and reach out to customers, word-of-mouth publicity still plays a crucial role. Speak to your peers about your outsourcing decision and enquire if they have worked with an accounting audit support provider. Often, these interactions can give valuable insights and help you make the right decision.
Search the web: One of the easiest ways to look for an outsourcing partner is to search the web. All you must do is type in the relevant keywords and you will have a list of the top audit support providers on your screen.
Attend seminars and events: Another highly effective way to connect with audit support services providers is by attending accounting events and conventions. These events see the active participation of numerous service providers, which can be a great opportunity for accountants to connect with outsourcing experts and discuss their goals.
As the audit market suffers from the impending effects of the massive audit failures by companies as enormous as the Big 4, you want to team up with a trusted audit outsourcing firm. Research is key to finding the right service provider and accountants must be thorough with it to land the best deal.
Read more: 10 Tips to Select the Right Audit Support Services Provider
The year 2022 is critical for the UK audit industry as there is tremendous scope for small and medium-sized accountancy practices to step into the market and land enormous clients. However, since these firms battle staffing and capacity challenges, audit support services are crucial to make the auditing process efficient and hassle-free.
Although outsourcing is a trend to look out for, the onshoring versus offshoring debate persists. Is it a good idea for accountancy firms to hire resources onshore, or is offshoring the way to go?
Well, both onshoring and offshoring have their benefits. While onshoring facilitates easy communication and reporting, offshoring helps practices save big on accountants’ salaries. This is one of the reasons accountancy firms in the UK look for audit support services in India.
According to Payscale, the average annual salary of an auditor in the UK is £28,821, while the annual salary of an auditor in India is £5,212. Plus, when you have an onshore auditor working from your office, you must arrange the necessary infrastructure such as a work desk, parking space, etc. Moreover, there are additional expenses on electricity bills, coffee and toilet paper, team lunches, and more.
While the salary of an Indian accountant is significantly lower than their UK counterpart, they work out of a delivery centre and are entirely managed by the audit support services provider, thus ensuring no additional operational costs.
Further, outsourcing audit support to India offers a range of benefits such as up-to-date knowledge of the latest UK audit regulations, technical expertise, seamless communication skills, and unparalleled dedication.
Read more: Should Accountants Outsource Audit Support Services to India?
We have already looked at the massive salary differences between a UK auditor and an offshore auditor in India in the above section. Evidently, outsourcing is the way forward for accountancy practices looking to make profits on their audit services.
But the real question is: How much does it cost to outsource accounting audit support in the UK?
To understand the cost of audit support services, let’s decipher how outsourcing companies charge for their services.
There are three key factors that majorly determine the pricing of audit support services UK.
There are numerous other factors that affect the final pricing of outsourced audit services in the UK.
Outsourcing firms provide custom pricing to audit clients based on their requirements. They also typically offer duration-based discounts, meaning the longer you hire an outsourced auditor, the lesser the per-resource cost of outsourcing.
On an average, the cost of hiring a full-time outsourced auditor in India for 12 months ranges between £2,000 to £4,000. If you are planning to hire an auditor on an ad-hoc basis, it will typically cost you between £25 to £40 per hour. These prices vary based on the seniority of the outsourced resource.
When choosing the right partner for audit support and preparation services, accountants must consider all critical factors such as an outsourcing company’s industry experience, market reputation, and awards and accreditations instead of simply choosing a company with cheaper costs.
Read more: How Much Does It Cost to Outsource Audit Support Services in the UK?
QXAS is a pioneer accounting outsourcing firm specialising in dedicated audit support services. We have an experience of 15+ years of functioning in the accounting industry. We understand the modern-day challenges faced by accountancy practices and provide custom staffing solutions to help firms battle talent gaps and scalability woes.
QXAS is the accounting outsourcing division of QX Global Group, an industry leader in outsourcing with operations in several countries, including the UK. We have a massive team of 1500+ accountants and audit professionals who work as a seamless extension of our clients’ teams.
The audit profession is rapidly changing in the UK with the introduction of new legislation, better regulation, and advancing technology. To provide the best solutions to our clients, we extensively train all our resources at QX Academy, the education and training arm of our enterprise.
We adopt a ‘People First’ approach in all our projects and offer custom pricing to help our clients scale quickly in the competitive accounting and audit market. With QXAS, your search for the best accounting audit support partner comes to an end.
To explore our services in detail, call us at +44 208-146-0808, drop an email at [email protected], or log on to Outsourced Accounting, Bookkeeping, and Payroll Services | QXAS UK. To avail a free trial of our services or schedule a call with our outsourcing expert, click here.
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