Audit in Malta 2022 | Griffiths + Associates

Audit and Assurance in Malta

Are you looking for the best Audit Services in Malta? Discover them at Griffiths + Associates Ltd.

Griffiths + Associates Ltd is a leading international tax, advisory and audit firm in Malta which is registered with the Malta Accountancy Board.

Our firm has decades of experience in auditing small to medium sized companies and groups of companies, whether operating in or outside Malta, involved in a wide range of businesses such as gaming, hospitality and leisure, wholes and retail sales, shipping, pharmaceutical, manufacturing and financial services.

We understand the expectation gap between what an auditor is providing in terms of his engagement and what the client expects from the audit. We thrive to bridge this gap and provide value through our audit services, satisfying client expectations with the completeness and accuracy of information contained in a company’s financial statements.

Based on the company’s needs, we offer dedicated assurance and audit services in Malta.

Assurance services include:

Valuations

A valuation of a company is a science and an art. Whilst it is submitted that there are no set valuation methodologies that are universally accepted as providing the finite value of a business concern, our understanding of this process enables us to provide an expert’s insight.

This extends to the type of industry which relates to the company being valued, together with geographical and socio-political factors which might effect the overall valuation methodology.

Due Diligence

Our audit team is comprised of experienced and knowledgeable Certified Public Accountants  who are experiencing in handling ad hoc due diligence requests for companies, including groups of companies, in various industries.

This specialisation includes also forensic analysis pursuant to specific transactions or events that would require the directors or shareholders of a company to need specialist advice on the viability of certain transactions or courses of action.

Review Engagements

Certain engagements, at times, are not focused on a fully-fledged audit but a review of the relative financial statements. Such reviews require the auditor to be aware of his duties and brief in order to be able to provide such services as efficiently and effectively as possible.

Our firm has experience in carrying out audit reviews in terms of International Standards on Auditing and has been engaged by various international clients to provide such services.

Audit services include:

Statutory External Audit Malta:
annual statutory, consolidated and liquidation audits

Considered as “external” / obligatory audit, it is required by law and ensures that a company’s financial statements give a true and fair view of the financial position and performance of the entity. Despite being a statutory requirement, the overall purpose of a financial audit in to bring financial discipline to business: uncover weaknesses in company’s internal controls and/or its accounting practices.

An external audit also enhances the degree of confidence of intended users in the Company’s Financial Statements and provides a greater level of assurance to banks when assessing applications for credit facilities.

The first steps to an external audit are that of appointing an independent external auditor, and presenting financial accounts and extended trial balances by the client’s management team to the auditor. The auditor then sets the audit plan and requests missing documentation. Here at Griffiths + Associates we undertake to complete audits within one to two months from the date upon which the deliverables are presented to us as independent auditors.

Financial Reporting

Companies registered in Malta shall submit Tax Returns on an annual basis which are based on audited Financial Statements. The annual audited Financial Statements prepared under IFRS/GAPSME are submitted at the MBR annually within the terms of the Companies Act 1995.

We specialize in preparing Financial Statements in terms of International Financial Reporting Standards (“IFRS”) and, when necessary, in terms of the Generally Accepted Principles for Smaller and Medium-sized Enterprises (“GAPSME”).

Due to the ever-changing requirements of the latter standards which evolve over time, we have the relative expertise in-house to be able to prepare basic or advanced financial statements in terms of the respective standards.

Contractual Internal Audit Malta

“Task-based” audits that are non-statutory by nature, aimed to address specific issues initiated by the stake holders and/or senior management of the business.
Usually this includes:

—   Business Risk Reviews and Risk Management (to all types of organizations, whether private or public). With these services we help clients to extrapolate business trends and enhance the decision-making process, as our goal in this case is to provide clients with insight on how they can enhance the efficiency and effectiveness of the business.

—   Uncovering internal control weaknesses to reduce potential fraud. With proper internal controls, you can grow and focus more on your core competences, as internal control tests help to provide more peace of mind both to the management team, but also the external auditor, who may choose to rely on some of these internal control results.When we are engaged as internal auditors to find weaknesses in internal controls, we work hand in hand with our clients to understand the processes and cycles of their business, and we then implement control mechanisms and standard operating procedures which in turn help to create a level of control within their environment.

—   Assurance Services & Expert Reviews; they are mainly targeted to obtain an independent expert opinion to provide company shareholders with assurance over the financial results, to facilitate the sale of a business, to provide assurance to the tax authorities and those financing the business such as banks or government’s agencies providing incentive schemes for enterprise. At times to avail of the benefits of government incentive schemes, the Companies are required to obtain an Audited Expenditure Statement from a qualified auditor. We conduct an audit of your expenditure statement in accordance with the applicable guidelines and IFRS.

Our company’s mission – to provide quality financial services to our esteemed local and international clients, keeping their needs at the centre of our ethos; going the extra mile to efficiently and effectively assist them in growing and fulfilling their business and personal needs.

Peter Griffiths – Managing and Tax Director
Peter Griffiths
Managing and Tax Director, Griffiths + Associates
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How we work with clients

Audit process with Griffiths + Associates

Learn More About How
Our Audit Approach Can Help Your Business

Griffiths + Associates provides value to the clients by creating a custom audit approach that is based on a client’s specific needs, risks and opportunities, using a professional audit management platform.

Our audit approach under generally accepted audit standards is depicted in the graphic below:

How Our Audit Approach Can Help Your Business

We draw your attention that the audit will be carried out by  specialists are part of the core team, not individuals brought in as required.

Our professional responsibility is to obtain sufficient audit evidence before an opinion is rendered on any financial statements. To achieve this, we will conduct our work in the following phases:

I. Audit planning and risk assessment:

No other phase of the process affects the success of an engagement more than the time spent in planning the general scope and direction of the audit, including assessing the risks of financial statement misstatements.

As part of that process, we will conduct a pre-audit meeting with management to discuss the scope and timing of the audit.

The risk assessment audit standards require assessments based on an understanding of internal controls over your financial reporting and determination of the areas that present risks of material misstatement to your financial statements.

We then design our audit approach to include tests of specific internal controls and substantive audit procedures which are tailored to the identified risks. Our risk assessment includes consideration of the factors depicted on the chart below:

Audit planning and risk assessment

II. Year-End Fieldwork and Substantive Testing:

Based on the results of our risk assessment and internal control evaluation, a specific audit plan will be designed to focus expanded procedures on areas with the greatest risk of material misstatement, error, and fraud. We will use tests of details, substantive analytical procedures, or a combination of the two to conclude on the reasonableness of the given transaction class or account balance.

By utilizing a blend of substantive testing (vouching underlying transactions to support), and substantive analytical testing (testing data through overall and stratified analysis), we are able to cover significant ground while still getting a quality level of detailed depth to our testing. Striking a good balance and not overlying on one type of testing over the other is integral to a thorough and efficient audit.

Audit Focus

The primary areas of audit focus in a typical year include:

  • Cash & Investments;
  • Receivables & Revenues
  • Capital assets;
  • Accounts Payable and Expenditures
  • Long-term debt and other liabilities;
  • Deferred Revenue
  • Compliance with purchasing and expenditures policies and controls;
  • Compliance with laws and regulations;
  • Any special transaction or situations with financial management or reporting significance;
  • Commitments and contingencies; and
  • Reporting in the financial statements in accordance with local Generally Accepted Accounting Principles.

Typical substantive procedures

  • Agreeing the financial statement elements to the underlying accounting records including year-end account balances and transaction activity occurring throughout the year;
  • Confirming cash held in bank and investment accounts, accounts receivable, inventory held by others, material grants and long term debt balances.

Substantive procedures are an integral part of a competent and thorough audit. Significant transactions must be supported evidentially, and when they cannot be supported that may be a symptom of a potential material misstatement or other systematic issue.

Typically, the “proof is in the pudding”, so to speak, and in many cases the best way to test something is by verifying the ingredients that make it up.

Audit Sampling

Audit sampling provides the auditor an appropriate basis on which to conclude on an audit area by examining evidence from a sample of the entire population.

We utilize both statistical and non-statistical sampling techniques, depending on the type of testing being performed.

Internal control, substantive and compliance testing samples are generally selected using nonstatistical techniques. Sample sizes are determined by risk assessment and nature of the population.

Typical analytical procedures

Compare financial information with comparable prior periods.

  • Compare operating results with consumption or usage type reports.
  • Compare ratios of correlating accounts year over year.
  • Compare results to budget and determine reasons for any significant variances between budget to actual results.

This analytical work allows us to form quality expectations to compare results to. When results don’t align with our expectations we investigate further to obtain sufficient evidence to conclude whether there is a valid reason for the deviation or if not, determine the root of the issue causing the variance.

This is a great method for identifying systemic and significant issues and/or material misstatements.

III. Reporting:

This phase includes:

  • Reviewing the financial statements and agreement to underlying audited records;
  • Evaluating the financial statements for compliance with IFRS or GAPSME requirements;
  • Formulating an opinion as to the fair presentation of the financial statements; and
  • Preparing management letter with recommendations and communication letter to the Board.
  • Formal presentation.

We believe regular communication with management will be a critical part of the success of our audit engagement. Therefore, we will provide regular updates to management regarding the progress of the audit during meetings with key personnel.

Additionally, the engagement partner will discuss with management to review any potential adjusting journal entries, drafts of the management and communication with those charged with governance letters, and a draft of the financial statements, as prepared by management.

We will complete our work in sufficient time to meet the applicable deadlines each year. We will make a formal presentation of the audit results and reports to the Board of Directors and be available to respond to their questions.

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© By Olga Saliba

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