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.