IFAs have welcomed news the Financial Services Authority (FSA) is proposing to remove the statutory audit requirements in the Companies Act for small firms and Appointed Representatives (AR).
Bhupinder Anand, managing director of Anand Associates in London, says: “It is good news for small firms, particularly those who don’t handle client money.”
He believes the audit requirement is an unnecessary expense for IFAs who are no different to their neighbouring businesses.
He adds: “It is refreshing to see the FSA finally helping small IFAs.”
Likewise, Rod Shakespeare of Rosa Lodge Financial Management in Worcestershire, states: “To me it is really important because audits are an additional cost for IFAs running a limited company.”
He believes it is unfair that sole traders and partnerships are not required to have their accounts audited while small IFA firms pay an additional £1,500 a year.
Further, he questions what benefit the FSA currently gets from requiring audited accounts, stating that his firm’s accounts go straight to the network and not to the FSA.
Kevin Anderson, director of Budge and Company in North Yorkshire, states: “We welcome anything that saves small IFAs money. Audits are an expensive item and for small firms the costs are disproportionate.”
He thinks any proposal that reduces the costs for small firms but preserves the integrity of IFAs among consumers is welcome.
Likewise, Tony Byrne, managing director of Byrne Williams in Buckinghamshire, believes the proposal is good news and says there is no point of having audits from firms which do not handle client money.
He adds: “The proposal will save auditor fees and I can’t see any loss to investors. It will reduce the time spent by accountants who follow a long list of checks and should reduce fees.”
But Mark Loydall, director of Cambourne Financial Planning in Leicestershire, warns firms not to go out and sack their accountant straight away.
He believes the proposal is good news but says caution is needed for firms’ own “peace of mind”.
(To find out more about the FSA’s proposal, see “FSA proposes to remove audit requirements”)
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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