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.
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.
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.
Assurance Services Include:
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.
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.
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.
How we work with clients
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:
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:
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.
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 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.
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.
© By Olga Saliba
Frequently Asked Questions (FAQ)
What is a tax auditing?
A tax auditing is the inspection of the taxpayer’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct, as the fact that a taxpayer declared tax returns to the tax department in time does not mean that a taxpayer has completed the tax obligation.
The purpose of conducting a tax audit:
Maintain and ensure the accuracy of books of accounts; and
taxpayer’s compliance with the tax law.
Tax audit process in Malta:
The Maltese Commissioner for Revenue is entitled to raise an investigation and notify the taxpayer in writing that the department is initiating a tax enquiry. In such investigations, the taxpayer will typically be required to provide information and supporting documentation in respect of queries raised by the Revenue.
Types of tax audits:
- mail tax audit:
this is the simple tax audit that the tax officer notified and request the taxpayer to provide additional documents or clarification on the certain tax return declaration and deductions.
- office tax audit:
this is the additional procedure to the mail audit where a client needs to visit the tax department to bring documents and be ready for tax officers’ questions.
- field tax audit:
this is a depth audit from tax departments if they have some special suspicion on client’s declaration, in this case a tax officer examines documents and questions a client onsite.
- desk tax audit:
this is sometimes similar to a mail tax audit, in this kind of audit, the tax officer reviews the document that taxpayers submit to them monthly or annually as per tax law requirements.
- limited tax audit:
this is an in-depth over-desk audit which is normally performed at the site or office of taxpayers to examine and inquire additional information from taxpayers for specific areas.
- comprehensive tax audit:
this is the same as a field audit, a taxpayer must be informed tax officers about their visit and the types of documents that they will review and they want taxpayers to be ready for their review.
Statute of limitations in Malta:
- for income tax:
income tax assessment may be issued not later than five years from the end of the year in which the tax return or further return for that year is filed. This period will not apply where a taxpayer would have made incomplete disclosure of material facts or wilful disclosure of incorrect or misleading information in the income tax return/s.
- for VAT:
with respect to VAT assessments, the prescription period is limited to six years from the end of the relevant tax period or the filing date of the said tax return.
Possible implications of a tax audit for a taxpayer:
- interest and administrative penalties; and
- a criminal investigation.
How long does a tax investigation take?
A tax investigation may be completed within months or a number of years – the duration thereof would highly depend on the complexity of the case in question.
You are next on the Revenue’s hit list – how to reduce this possibility:
- file your taxes on or before the due date, and
- stay abreast of tax changes.
How can we help?
Griffiths + Associates can help on a wide range of tax investigation matters including corporate tax, personal tax, VAT and FSS audits.
Internal audit Malta - the difference between external and internal audit
Definition of internal audit:
Internal auditing is an independent, objective assurance and consulting activity designed to provide assurance that a company’s risk management, governance and internal control processes are operating effectively.
Value to the company:
Internal auditors deal with issues that are fundamentally important to the survival and prosperity of any company: unlike external auditors, they look beyond financial risks and statements to consider wider issues such as the company’s reputation, growth, etc.
The difference between external and internal audit:
External and internal audits have very different objectives.
- External audit: it is intended for shareholders or members who are outside the company’s governance structure; the objective is to add credibility and reliability to financial reports from the company to its stakeholders by giving opinion on the report; the coverage is financial statements, financial reporting risks; the responsibility for improvement is none, however there is a duty to report problems.
- Internal audit: it is intended for the Board of Directors and senior management who are within the company’s governance structure; the objective is to evaluate and improve the effectiveness of governance, risk management and control processes; the coverage is all categories of risk reports and their management; the responsibility for improvement is fundamental, it should be done by advising, coaching and facilitating in order to not undermine the responsibility of management.
Internal audit Malta:
Griffiths + Associates acts as a consultant providing advice and acting as a catalyst for improvement in a company’s practices. Clarifying this, our internal audit activity is fundamentally concerned with evaluating a company’s management of risk as that’s what a key to a company’s success.
To evaluate how well risks are being managed, we assess the quality of risk management processes, systems of internal control and corporate governance processes, across all parts of a company and report this directly and independently to the executive management and boards.
We highlight where improvements are necessary and thereby help executive management to understand how much effectively they are on behalf of their stakeholders.
We have a professional duty to provide an unbiased and objective view. To be effective, our audit department has qualified, skilled and experienced professionals (CPAs who are part of the core team not individuals brought in as required) who work in accordance with the Code of Ethics and the International Standards.
Auditing Malta, is it a duty?
Speaking of “Auditing Malta”, we should remember that to date statutory audits of financial statements in Malta are obligatory for all companies irrespective of the size and activity of the entities: the annual audited financial statements must be prepared in accordance with IFRS or GAPSME and submitted at the MBR annually. Despite being a statutory requirement, the overall purpose of a financial audit is to enhance the degree of confidence of intended users in the Company’s financial statements.
For the highest quality auditing Malta, turn to Griffiths + Associates. Our audit team focuses on highlighting weaknesses and making recommendations for improvement while ensuring complete integrity and impartiality.
We can provide you with assurance services covering the following:
- Statutory audit;
- Liquidation audit;
- Voluntary audit;
- Due diligence reviews; and
- Ad-hoc investigations.
"Audit accounting" is a frequent search query, so let's try to clarify what is it?
This wording implies auditing. Auditing is a part of the accounting world. Some interesting fact, auditing originates from the Latin term “Audire”, which means “to hear.”
By definition, auditing is an examination of accounting and financial records that is undertaken independently. This is done to determine if the company or the business undertaking has conformed its operations to the laws and the generally accepted accounting principles.
Auditing has 2 main categories – internal and external audit.
You can read more in our expert publication above.
Full array of Audit services in Malta
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