Audit…the Assured Choice…Feb. 9, 2017, 9:26am
Small businesses in the UK are exempt from the requirement to have a statutory audit. We ask why would you choose to have an audit?
New regulations increased the thresholds for qualification as “small” as follows:
- turnover: from £6.5m to £10.2m
- balance sheet total: from £3.26m to £5.1m
- number of employees: remains unchanged at 50.
The new regulations apply to periods commencing on or after 01 January 2016; however, if the directors so decide, they may be applied to periods commencing on or after 01 January 2015.
This option for early adoption is important as it means that a company that is currently medium sized but which would be small under the new limits can move directly to FRS 102, with reduced disclosure for small companies, rather than having to apply FRS 102 in full for 2015 before becoming small in 2016: a significant benefit.
The new thresholds described above also apply for audit exemption purposes. However, care is needed here.
For audit exemption purposes, the new thresholds apply to periods commencing 01 January 2016. Therefore if, as described above, a company adopts the new thresholds for a period commencing on or after 01 January 2015 but before 01 January 2016 it will not be exempt from audit in that period.
The Audit Choice…
You may find that your company is audit exempt under the new regulations, but is audit just something that is imposed on your business or do you and your business benefit from the audit?
An audit is more than just ‘ticking’ a box…you and your business can benefit:
- Analyse and understand your company’s financial records.
- Identify key areas for improvement in the business.
- Enhance the credibility and reliability of the financial statements of the business.
- Provides an assessment of risks, economy, efficiency and quality in the business.
- Assurance for shareholders and investors
- The potential to uncover fraudulent or other illegal activities within your company.
- Tests, reinforce and strengthens internal controls
- Audit can be an informative and sometimes educational process for the business owner
Talk to us about audit…make the right choice for you and your business.