A Conversation with Danielle Bonhomme on the Value of Assurance
We sat down with Associate Director, Danielle Bonhomme, who leads assurance services at PKF Channel Islands, to talk about what assurance really means in practice. From audits and assurance reviews to specialist engagements such as agreed-upon procedures and
Can you start by telling us a little about your role at PKF Channel Islands and what you look after day to day?
I am an associate Director within the Audit team. My role is varied, assisting and managing audits of a range of clients as well as heading up the non-audit assurance side of the practice. I lead the assurance reviews and AUPs primarily, supported by the audit team.When people hear the term ‘assurance’, they often think only of audit. How would you explain assurance services?
An audit is one assurance service, but assurance is much broader than just audit. Assurance services involve an independent professional appraising information and providing confidence that it’s reliable, accurate, or fit for its intended purpose.Why is assurance becoming more important for businesses today, beyond meeting statutory requirements?
Businesses today operate in a much less forgiving and more scrutinised environment – given the past “scandals” and the immediacy of information availability. Having an independent firm provide assurance gives stakeholders better confidence over more than just the financial information. This can protect the reputation and trust in the business.What types of organisations typically benefit most from assurance work?
All types of organisations can benefit from assurance work. Assurance work can be beneficial for a number of reasons, primarily where trust and transparency really matter. It can be especially beneficial where owners are not involved in the day to day finance, to provide independent comfort that the financial information can be relied upon, assurance can reinforce governance and demonstrates accountability. For charities, this can also provide comfort over good stewardship of funds. We provide assurance services to a wide range of clients – ranging from property managers, charities, trading companies and trust companies to name a few.PKF Channel Islands offers both statutory and non-statutory audits. What’s the difference, and how do clients know which they need?
Statutory audits are required by law. Meaning that the client will need one due to this being in statute or a regulatory requirement. A non-statutory audit is where the company chooses to have an audit and is not mandated by law/regulation. Although this is a “voluntary” audit, there may be reasons as to why the company needs an audit such as it being a requirement of a loan/ grant agreement or charitable constitution.PKF Channel Islands provides a range of specialist assurance services. Can you talk us through some of these, such as assurance reviews, agreed-upon procedures and due diligence work?
For an assurance review, we perform procedures, primarily consisting of making inquiries of management and others within the entity, as appropriate, applying analytical procedures, and evaluating the evidence obtained supporting this. The procedures performed in a review are substantially less than those performed in an audit conducted in accordance with International Standards on Auditing (UK). An assurance review provides limited assurance over a certain topic. It would provide limited assurance that the financial statements are free from obvious errors/omissions and misstatements.
An assurance review report requires us to conclude whether anything has come to our attention that causes us to believe that the financial statements, taken as a whole, are not prepared, in all material respects, in accordance with the selected accounting policies/ Accounting standard applied. As opposed to an audit, where the audit report which expresses an opinion that the financial statements give a true and fair view of the Company at the reporting date and its results for the year then ended and that the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice.
For an AUP, we would agree procedures with management and only undertake these procedures. We would then provide a report stating the factual results of these procedures, we would not express an opinion or provide an assurance conclusion or recommendations.
Control reviews – we can review the internal controls within an organisation to verify whether they have been designed and implemented effectively. We usually couple this with an additional report providing recommendations on where there are potential areas for improvement.
We also provide ISAE3402 control reports (both type I and type II), whereby we review the controls at a service organisation. These reports can then be relied upon by the organisations clients and auditors.
Additionally we offer more specialised assurance work including service charge reviews, law society client money reviews and CAA ATOL (we are ATOL reporting accountants) and ABTA reviews. We are also currently in progress of expanding our assurance services into sustainability assurance given that this is a hot topic and has an evolving regulatory environment currently.
PKF is one of only four firms in the Channel Islands able to carry out CAA ATOL reviews. Why is this accreditation significant, and what does it say about PKF’s assurance capability?