How to start a financial auditing business

Take your financial auditing career to the next level by setting up your own company.

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Financial auditing is a necessity for both small businesses and large companies. Not only is it necessary to ensure tax law compliance, but also to support proper budgeting and financial planning. As a qualified and registered financial practitioner, you can offer auditing services to Australian businesses. If you'd like to take those skills and start your own business, our guide will take you through the qualifications and legal requirements you'll need to get your venture off the ground.

What is a financial auditing business?

A financial auditing business inspects other business's financial accounts in accordance with generally accepted accounting principles. An auditor validates a company's financial statements to ensure they're fair and true.

How to start a financial auditing business

Use this checklist to set up a financial auditing business:

  1. Identify your niche. Identify your target client and research your competition. Work out how you can stand out and offer a better service, price or other speciality. You may, for example, aim your services at a particular industry.
  2. Choose the right structure for your business. For many business owners, operating as a Sole Trader or Partnership is a cost-effective option. If you have investors or want to split profits in a more complex way, you might consider registering your business as a company.
  3. Develop a business plan. A business plan helps you consider your services, pricing, competitors and finances. Include market research and your projected income and expenses to get a better idea of what to expect in your first months of operating. As your financial auditing business grows, a business plan is also key to attracting investors and lenders.
  4. Create a brand name and logo. You'll need a professional logo and business name to promote your business. If you don't have the budget for a graphic designer yet, you can use graphic design tools to create your own logo.
  5. Register your business. You'll need to register your business name with the Australian Securities and Investments Commission (ASIC) and get an Australian Business Number (ABN).
  6. Open an office or home office and buy necessary equipment. You can run your office as a home office or in a coworking space, and communicate with clients on the phone and online. If you want an office for your auditing business, you will need to find a suitable commercial space that is accessible to your target clients. You'll also need to consider the costs of office equipment, furniture, stationery, computer equipment and perhaps even a vehicle, if you need to travel to clients regularly.
  7. Consider loan options. You may need to apply for a loan to start your business if you rent a commercial space. If you can't access a business loan, a personal loan option might be suitable.
  8. Consider legal needs. You may need to get legal document templates such as a Service Agreement. If you're renting a commercial space to run the office, you may also need to speak to a commercial lease lawyer. It's essential to consider Professional Indemnity Insurance, and typically also Errors and Omissions Insurance, to protect yourself.
  9. Market your business. A modern marketing strategy oftens includes investing in building a website and online presence so clients can find you. Networking is also effective if you target a niche market. Walk-in businesses are not typically the main way that clients find a financial auditor, but signs are still needed if you run an office in a high foot-traffic area.

financial auditor at work

Identify your skills and knowledge

Financial auditors examine the financial records of organisations to ensure they are prepared in accordance with Generally Accepted Accounting Principles (GAAP). They investigate financial records for instances of errors and fraud, ensuring accuracy and authenticity, as well as compliance with securities and tax laws.

To start a financial auditing business, you should:

  • Know how to prepare financial statements like income statements and balance sheets
  • Be focused and detail-oriented
  • Be good with numbers and competent at quantitative analysis
  • Know how to use accounting software such as QuickBooks
  • Have critical thinking and investigative skills.
  • Be organised and work effectively independently
  • Be able to gauge an organisation's exposure to financial risk

Beyond auditing skills, you will have to know how to market your business, communicate effectively with client organisations' financial teams during audit processes and oversee auditing engagements to completion.

Get the right qualifications

You have to be fully qualified to offer financial auditing services to companies in Australia. The Australian Securities and Investments Commission (ASIC) maintains a register of qualified auditors in the country. To register, you should:

  • Hold an academic qualification in auditing or equivalent qualifications
  • Complete relevant courses such as CPA Australia's Advanced Audit and Assurance program
  • Meet approved competency/practical experience standards
  • Be capable of performing auditing tasks
  • Be a fit and proper person
  • Show evidence of sufficient Indemnity Insurance
  • Comply with ASIC's Code of Professional Conduct

ASIC goes into detail on each of these requirements. For example, to meet its practical experience standards, you must have either:

  • At least 3,000 hours of practical auditing experience in the last 5 years under the guidance of a registered auditor
  • Or at least 750 hours of experience supervising audits, or the equivalent in practical experience

To be considered a fit and proper person, you should not have been convicted of an offence that involves an element of dishonesty in the last 10 years or be found civilly liable for breach of trust or fiduciary duty in a similar period.

Here is a list of websites that offer accounting courses:

Name Product Are accredited courses available? Are free courses offered? Payment methods
Training.com.au
Training.com.au - Accounting
Yes
No
Visa
Shortcourses.com.au
Shortcourses.com.au - Accounting
Yes
Yes
TafeCourses.com.au
TafeCourses.com.au - Accounting
Yes
No
Visa
Udemy
Udemy - Accounting
Yes
Yes
Visa,Mastercard,Discover Card,American Express,PayPal
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Buy the right equipment and software

You will need an office or workspace for your business. You can lease a commercial space, set up a home office or even book a desk at a coworking space if you are starting on your own. You will need to purchase office equipment such as:

You will need to purchase accounting software such as QuickBooks, project management software and also consider creating a website for your business. On your website, it's a good idea to include an "About Me" page detailing your qualifications, licences, experience and recognitions.

Choose a business structure

You will have to register your business with the government before starting operations. In brief, follow these steps to registration:

  1. Name and structure. Choose a name and business structure for your auditing business. Take into account purchasing its domain name and a trademark.
  2. Register your business at register.business.gov.au.
  3. ABN. You will then receive an Australian Business Number (ABN) to identify your business for tax purposes.
  4. Business licence. Complete the legal registration process by applying for a business licence from your state authority.
  5. GST. You may have to register with the Australian Taxation Office (ATO) for goods and service tax (GST) if you expect your revenue to exceed $75,000 a year.

First choose a name for your business and then purchase its domain name. You could also consider registering the business name as a trademark.

Afterward, register a structure for your business. Each has its pros and cons, as well as tax implications:

  • Sole Trader. The business's income is taxed as part of the sole owner's personal income. You have full control and responsibility over the business.
  • Partnership. Partners are taxed on their share of the Partnership's net income. A Partnership is formed of two or more people who go into business together. All partners have equal control over the business.
  • Company. The business becomes its own legal identity and is taxed at corporate rates, so your personal assets are not at risk. The major decisions are decided by shareholders.

Note that you can register as a financial auditor with ASIC as an individual or company. Take into account:

  • Sole Trader. For this business structure, you may need to register with ASIC as an individual financial auditor.
  • Partnership. In an audit firm Partnership, at least one partner will need to be registered with ASIC.
  • Company. If you opt for a Company, you can register yourself as well as the Company.

The exact documents you need will depend on your specific business, but you may need to use some of the following legal documents in your business:

You can hire an online lawyer. To do more of the groundwork yourself and keep costs down, you can go online to download customisable legal document templates from the following services.

Name Product What's offered? Starting price to become a member Annual Fee from Free legal documents available?
Lawpath
Legal documents and templates, Access to lawyers, Legal guides, Legal advice
$79 per month
Essentials: $288, legal advice: $828
You can view samples for free and you can create your first document for free.
Choose an annual plan from just $288 and get unlimited revisions to your legal or business documents. Plus, unlock exclusive partner offers.
LawDepot
Legal documents and templates, Legal guides
$4.99 per month
$59.88
Free one week trial available which gives access to hundreds of documents.
Customise and download legal documents in as little as five minutes. Plus, LawDepot offers peace of mind with two service guarantees.
Legal123
Legal documents and templates, Legal guides
Varies per template
N/A
No
Legal123 offers a range of individual templates or document packages for consultants, app developers, personal trainers and more.
LegalVision
Legal documents and templates, Legal guides, Legal advice
$49 + GST per week
$2,548 + GST
No
Your business can take advantage of unlimited lawyer consultations, fast turnaround times and free legal templates with LegalVision.
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How much to charge

You can charge your clients a fixed fee for every project or an hourly fee. You can also opt to set up a retainer pay structure for repeat clients, securing steady cash flow for your business.

Many startup financial auditing firms start with an hourly pay structure as they use more time to complete projects and have not yet figured out an accurate pricing model to ensure profitability. Later on, when they accumulate enough experience and can estimate a project's scope more accurately, they go with fixed fee models. You can reach out to competitors in your area to get their quotes, then determine a suitable fee for your services.

Promoted
Get your business moving with payment terminals, QR code ordering, invoices and more.

How to attract clients

One way to build your customer base is by aggressive networking. Attend business events and trade association conferences to meet new clients, tell them about your services and hand them your business cards. Once you have a base of customers, word of mouth becomes an efficient way to bring new clients.

Next, set up profiles on professional networking sites like LinkedIn and offer valuable general tips on financial planning and taxes, positioning yourself as an approachable authority on all matters related to auditing. You can even invite businesses to join your newsletter and receive additional financial tips. The more you engage with businesses, the more likely you will grow your customer base.

You can also opt to list your services on online marketplaces like Airtasker and Upwork, or on online business directories like White Pages and True Local.

Frequently asked questions

What insurance do you need as a financial auditor?

You need Professional Indemnity Insurance to be registered as an auditor with ASIC. Also consider Errors and Omissions Insurance.

Is there demand for financial auditing?

Job listing platform Seek projects a 9.9% job growth for financial auditors from 2019 to 2024.

Do auditors do the same work as accountants?

Accountants provide organisations with everyday bookkeeping support. They track revenue and expenses, create financial reports and prepare taxes. Auditors come in later to verify the accuracy and authenticity of financial reports and taxes.

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