‘Audit Exemption Limits’

When is an audit necessary?

Monday, October 21st, 2013

Even if a company isn’t required to be audited by law, there can still be good reasons for appointing an auditor to undertake this exercise and produce an audit report.

Essentially, an audit provides reassurance that the figures in the financial statements are ‘true and fair’. Commercially speaking, this places the company in a strong position in the eyes of various stakeholders as a clean audit report lends more credibility to the accounts.

The audit requirements changed for companies with a year ending on or after 1 October 2012 and the changes are explained below.

If you would like to discuss how appointing an auditor could help your company, please contact Curo’s head of audit, Anna Madden on 01527 558539 or email Anna on [email protected]

Companies required by law to have an audit

The rules governing which companies are required to have an audit have changed. For company year ends ending on or after 1 October 2012, a company may qualify for an audit exemption if it is ‘small’. That means that it can satisfy 2 out of the following 3 criteria:

  • has assets worth no more than £3.26m
  • has an annual turnover of no more than £6.5m
  • has on average fewer than 51 employees

However, even if a company qualifies for an exemption based on the above criteria, it may still be required to undertake an audit after consideration of prior years’ results and group considerations. Additionally, some companies are specifically unable to take the exemption.

To discuss your audit options, contact Anna Madden, Curo’s head of audit on [email protected] or call Anna on 01527 558539.

SMEs to benefit from change in audit exemption limits

Monday, September 10th, 2012

It was announced recently by Vince Cable that the number of companies required to have an audit is to fall, following a reduction in the auditing and reporting requirements.

Following a lengthy consultation process, more businesses are able to decide if they have a statutory audit. It is expected that more than 100,000 businesses will benefit from these changes through reduced accountancy and admin costs, in addition to the time freed up to spend on running the business itself.

It will be mostly subsidiary companies which are exempt from an audit, providing their parent company guarantees their liabilities.

Additionally, the changes to the exemption criteria are expected to benefit approximately 36,000 companies. They now need to meet only 2 out of 3 of the criteria need to be exempt from an audit. (Previously all three conditions had to be met)

These criteria are:

No more than 50 employees
No more than £3.26m on the balance sheet
Less than £6.5m turnover

The changes are expected to come into force for accounting years ending on or after 1 October 2012.

If you would like to discuss your audit and accounting requirements in more detail, Anna Madden, Partner at Curo Chartered Accountants can guide you through the process. Anna can be contacted at [email protected] or on 01527 558539.