Pedo & Associates

Overview

How does an audit protect our business interests and stakeholder relationships?

An audit provides independent verification of your financial statements, enhancing credibility with banks, investors, and business partners while identifying potential risks before they become costly problems.

What exactly does your audit firm examine during an engagement?

We conduct comprehensive reviews of your financial records, internal controls, compliance procedures, and business processes to ensure accuracy and regulatory adherence.

How will the audit process impact our daily operations?

Our team works closely with your staff to minimize disruption, typically requiring access to records and brief interviews with key personnel during regular business hours.

What’s the difference between the audit services you provide versus what our internal team does?

External audits provide independent verification and credibility that internal reviews cannot offer, meeting regulatory requirements and stakeholder expectations.

Audit Types and Their Business Applications

When would we need a statutory audit versus choosing to have a voluntary audit?

Statutory audits are legally required based on your company size, structure, or industry, while voluntary audits provide strategic benefits even when not mandated, such as improved governance and stakeholder confidence.

What’s the difference between the financial audit we need and specialized audits like compliance or operational reviews?

Financial audits focus on your financial statements’ accuracy, while specialized audits examine specific areas like regulatory compliance, operational efficiency, or internal controls based on your business needs.

Should we consider internal audit services in addition to our external audit?

Internal audit provides ongoing monitoring and improvement recommendations throughout the year, complementing the annual external audit with continuous risk management and control enhancement.

How do forensic audit services differ from our regular audit, and when might we need them?

Forensic audits investigate suspected fraud or financial irregularities using specialized techniques, while regular audits focus on overall financial statement accuracy and compliance.

Legal & Regulatory Compliance

What professional qualifications should we expect from our audit team?

Our audit professionals are registered with bodies like ICPAK(Institute of Certified Public Accountants of Kenya) and hold global certifications such as CPA(K), ACCA, or CA.

How do international accounting standards affect our audit?

We ensure compliance with IFRSas adopted in Kenya, in addition to local reporting frameworks and KRA requirements, depending on your organization type.

Does our company legally need to have an audit performed?

Audit requirements depend on your company’s size, turnover, and structure, as outlined in Kenya’s Companies Act, 2015 and regulatory guidelines for sectors like NGOs, SACCOs, and financial institutions.

What triggers the need for an audited financial statement?

Banks, investors, regulatory bodies, or company bylaws often require audited statements, particularly for loans, investments, or public filings.

How do audit requirements differ for small businesses versus larger corporations?

Smaller entities may qualify for review engagements or compilations instead of full audits, while public companies face stricter statutory requirements.

Audit Reports & Documentation

What will we receive at the end of the audit process?

You’ll receive a formal audit report with our opinion on your financial statements, management letter with recommendations, and detailed findings discussion.

Can changes be made to the audit report after it’s issued?

Reports can only be revised under specific circumstances involving discovered errors or omissions, following strict professional standards and documentation requirements.

How should we present the audit report to our stakeholders?

We provide guidance on communicating audit results to boards, investors, lenders, and other parties who rely on your financial information.

Independence, Ethics & Additional Services

Can you help prepare our financial statements in addition to auditing them?

We follow ICPAK and international independence guidelines, and will clearly outline any preparation services we can offer without compromising auditor objectivity.

What consulting services can your firm offer alongside audit work?

We offer advisory services including risk management reviews, KRA tax health checks, and governance consulting, while maintaining our independence during audit engagements.

How long can your firm continue as our auditor?

We can serve as your auditor indefinitely, though some regulations require periodic partner rotation to maintain independence and fresh perspective.

Working Relationship & Expectations

What information and access will your audit team need from our staff?

We’ll provide a detailed request list covering financial records, supporting documentation, system access, and availability of key personnel for interviews.

How do you ensure confidentiality of our sensitive business information?

All staff sign NDAs and we follow strict data protection protocols, including compliance with Kenya’s Data Protection Act, 2019.

What happens if your audit uncovers significant issues or irregularities?

We immediately communicate material findings to management and appropriate governance bodies, providing recommendations for resolution and improvement.

Timeline & Process Management

How long will the audit take from start to finish?

Timeline depends on your company size and complexity, typically ranging from 2-8 weeks for fieldwork, with additional time for planning and report preparation.

What can we do to help make the audit more efficient?

Proper preparation of requested documents, availability of key personnel, and strong internal controls significantly streamline the process.

When during the year should we schedule our audit?

Most Kenyan companies schedule audits shortly after fiscal year-end (Dec or June) to meet filing deadlines and donor reporting cycles.

Cost & Value Considerations

How do you determine audit fees for our engagement?

Fees depend on engagement scope, industry risk profile, regulatory reporting complexity, and time investment, and are aligned with ICPAK’s professional fee guidelines.

What value does an external audit provide beyond compliance requirements?

Audits offer credibility enhancement, internal control improvements, risk identification, and valuable business insights from our independent perspective.

Are there ways to reduce audit costs without compromising quality?

Good preparation, strong internal controls, and collaborative approach with our team can improve efficiency and reduce overall engagement costs.