Changes to statutory audit exemption criteria (applies to accounting periods ending on or after 1st October 2012)
For financial years ending on or after 1st October 2012 the following now applies. Please discus these changes with your accountant.
Companies will not require a statutory audit if they satisfy at least two of the following criteria:
- < 50 employees
- Total assets(net book value) £3.26m
- Revenue < £6.5m.
Essentially, these changes mean that a small company, as defined by the Companies Act, will not require a statutory audit. However, the following should be noted:
- If a shareholder(holding 10% or more of the company)requests an audit then a audit will be required
- If the companies articles of association require an audit then the company will still require an audit
- If the companies bank requires the company to be audited as a condition of lending then the company will still require an audit
Furthermore, there are other benefits to having an audit that should be considered. For example, the users(customers, lenders, suppliers, HMRC) of the companies accounts will benefit from the increased level of confidence that an audit provides.
Note: Please note that the rules for charities and other not for profit entities are different. The above changes do not apply to your organisation.