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AUDITS

"Do you know why you need an audit or why you should have one?"

The main reasons why you will be required by law to have a statutory audit are...

  1. You are a PLC or a banking, insurance or finance company (or a subsidiary of one of these);

  2. You are required by your professional or trade organisation to have your accounts audited;

  3. Your shareholders do not agree to opting out of the audit.​

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For accounting periods starting on or after 1 January 2016 audit thresholds are aligned with the new qualification as a small company, meaning companies (including LLP's) are exempt from having a statutory audit if they meet 2 of the 3 following conditions...

  • Turnover below £10.2 million

  • Balance sheet total below £5.1 million

  • Less than 50 employees

Audit (Part 2)

For accounting periods starting before 1 January 2016 and ending on or after 1 October 2012 small company, meaning companies (including LLP's) are exempt from having a statutory audit if they meet 2 of the 3 following conditions...

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  • Turnover below £6.5 million

  • Balance sheet total below £3.26 million

  • Less than 50 employees

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Most subsidiary companies are also exempt from audit where their parent company guarantees their liabilities.

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For accounting periods ending on or before 30 September 2012 an audit is required where your turnover exceeds £6.5 million or your gross assets exceed £3.26 million or the company is part of a group that exceeds those limits.

Audit (Part 3)

We can advise you if you need an audit and if not, you can save on accountancy fees!

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However, we aim to deliver hassle-free audits and there are good reasons for having an audit even if you are not required by law to have one...

  • An audit involves a detailed review of the company's accounting systems and systems of control and also requires a detailed understanding of the company's business. Such a review and knowledge can provide increased opportunities to provide proactive business advice on many matters;

  • An unqualified audit report can improve the status of the accounts in the eyes of banks and commercial lenders, the Taxman and suppliers who may be seeking credit references, etc;

  • A history of accounts with clean audit reports can also be a factor if you ever wish to sell the company or, perhaps, take it to the market;

  • The possibility of fraud can be reduced and an audit can act as a deterrent to any potential fraudster.

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