Does my company need an audit?
There are a few reasons why your company could need an audit:
- You have outgrown the statutory audit exemptions
- New investors have included an audit requirement in the funding agreement
- You might just value the objective independant insight into your accounts and financial processes that an audit will provide
The statutory audit exemptions are:
- The audit regime only applies to limited companies and LLP’s.
- Unincorporated sole traders and partnerships are exempt whatever their size.
When does my company need an audit?
For a non-group company, you will need to have an audit when you exceed 2 out of the following 3 tests;
- Turnover of more than £10.2m
- Gross Assets of more than £5.1m
- 50 or more employees
Haven’t the limits for audits changed recently?
Yes, the turnover and gross assets were £6.5m and £3.26m for accounting periods beginning before 1 January 2016.
Isn’t an audit just an extra expense?
No, an audit will include reporting on a company’s controls and identifying possible areas of weakness in a business that could, if unaddressed, give rise to losses.
Losses such as misappropriated stock, unauthorised sales at unauthorised prices, inadequate insurance cover.
Are there any other benefits to an audit?
Yes, if you are considering selling your business an audit in the years leading up to a sale may give further assurance to potential purchasers, regarding the operation and conduct of the business, making it a more attractive acquisition target.
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