Why Auditing Matters

What UK Businesses Need to Know Today

Auditing is critical in financial integrity. It helps companies demonstrate transparency and compliance while showing trustworthiness to regulators, investors, lenders and other stakeholders. Even where an audit isn’t legally required, many organisations choose to undertake one to strengthen credibility and support strategic decisions.

What is an audit?

An audit is an independent review of a company’s financial statements and related records. It evaluates whether they are accurate and compliant with applicable accounting and legal standards. An external auditor, completely independent from the business, is typically appointed to provide an unbiased audit opinion. Internal audit teams, meanwhile, focus on improving internal controls, risk management and operational effectiveness.

Which UK companies must have an audit?

In the UK, companies generally must prepare audited accounts if they meet at least two of these three size thresholds (for financial years that begin on or after 6 April 2025):

• Turnover exceeding £15 million
• Total assets over £7.5 million
• More than 50 employees

Previous thresholds:

• Turnover exceeding £10.2 million
• Total assets over £5.1 million
• More than 50 employees (no change)

Certain companies must have an audit, even if above criteria are met, these include:

• Public companies (PLCs)
• Certain regulated Financial Services firms
• Charities over certain thresholds
• Companies that are part of a group in certain circumstances
• Companies where an audit is requested by the requisite number of shareholders

Why audits are important

• Ensuring Accuracy and Reliability
• Strengthening Compliance with Laws and Standards
• Supporting Stakeholder Confidence
• Identifying Risks and Weaknesses
• Informing Strategic Decisions

Whether mandatory or voluntary, audits play a key role in the governance and credibility of UK businesses. They help organisations demonstrate compliance, expose risks early, foster trust with stakeholders and support better decision-making.