ORGANIZATION IN AN AUDIT FIRM


The organisation adopted by most of the large firms in Kenya involves a pyramid structure that is usually made up as follows:

           Partner

        Manager

   Accountant in Charge

Audit Assistants, Trainees, juniors

The partner would be responsible for the overall audit and he would sign the final accounts although most firms have a second partner with whom the first partner will consult particularly on matters of qualification in reports. In addition, the partner has to approve the detailed plan of work and give his authority before work can begin. He will carry out a final review of the work once it has been done before signing the accounts. It is his duty to ensure that up-to-date services and advice on all professional matters are provided to the client. He has to ensure continuity in the relationship which can be absent lower down the pyramid. With difficult clients he is also charged with negotiating the audit fees. He can be sued on behalf of the firm.

The manager is appointed for every job and he is responsible to a partner for satisfactory completion of that assignment. His initial responsibility usually involves preparing provisional timings and costing for the audit and to agree the timings with the client. He has to ensure that there are sufficient staffs at the right grade to cover the client's requirements. From the appropriate staff, he has to select the proper accountant in charge and to brief him on what needs to be done. He will also review the audit plan and the related budget which may be prepared by the accountant in charge and he will monitor the progress of the job constantly to ensure that targets are achieved. He has to review the working papers in detail before they are submitted to the partner for his final review. The manager is a crucial person in the audit assignment. He has to ensure that the proposed report is properly drawn up. He has to ensure that the deadlines are met; he has to ensure that the accounts comply with all regulations in every way.

The accountant in charge is sometimes referred to as a supervisor or audit senior. His job is to control the day to day operation of the audit. However, his degree of autonomy depends very much on a particular firm's policy, the personalities of the managers and the accountant's own experience and ability. His typical responsibilities include:

a) The collection of detailed information for the preparation of the audit plan.

b) The delegation of specific areas of work to the audit assistants or trainees.

c) The planning and supervision of the day to day running of the audit.

d) The constant review of progress by comparison of actual time spent against budget.

e) Ensuring that the working papers have been thoroughly prepared and are presented in an orderly manner to the manager and the partner for review.

If we look at his position, we find that of the whole audit team he is best placed to discover errors and irregularities. Also if the client is not a client of integrity, the accountant in charge is the easiest person to influence. He is also the easiest person to lose to clients who are looking for young energetic accountants to join their organisations.

Audit Assistants or trainees are responsible to the accountant in charge for the detailed work of the audit. They are expected to produce working papers set out in accordance with the firm's quality control procedures.