Companies of a certain size and companies which are public, insurance companies, involved in banking or investment firms regulated by the Financial Conduct Authority are required by law to undertake a statutory audit in order to ensure financial transparency and efficiency. A statutory audit is not required for a company (including an LLP) if it meets two of the three criteria listed below:
- Turnover not more than £6.5 million
- Gross assets not greater than £3.26 million
- Not more than 50 employees
Circumstances can dictate that the above limits are subject to adjustment or additional factors. Examples, inter alia, include:
- First period of accounts
- Companies which are part of a group
- Periods which are not exactly 12 months
The above criteria is changing for accounting periods commencing on or after 1 January 2016. In this instance, a statutory audit shall not be required for a company (including LLPs) if it meets the following two out of three criteria listed below:
- Turnover not more than £10.2 million
- Gross assets not greater than £5.1 million
- Not more than 50 employees
Please note that companies (including LLPs) can not adopt the above criteria of higher audit threshold levels early.
There are different criteria in respect of audits for charities and other not-for-profit organisations.
At Perrys, we work with our clients to ensure that they are able to fulfil their statutory obligations and file their audited accounts in an accurate and timely manner. Our exceptional approach to client relations means that we develop a deep understanding of their individual businesses and our audit service goes beyond simply documenting and reporting the numbers. Our tailored service offers exceptional value for money and enables us to explore the implications on the business, providing proactive advice and insight and giving recommendations on efficiency and improvement for the benefit of our clients, helping them to avoid issues in the future.
Non Statutory Audit Reports
The majority of small private limited companies are exempt from undergoing statutory audits of their annual accounts - unless the company's articles of association say they must or enough shareholders ask for an audit to be carried out. Regardless of whether your company is usually exempt from an audit, you must get your accounts audited if shareholders who own at least 10% of shares (by number or value) ask you to do so.
However, those businesses which are not obligated to undergo a statutory audit may still opt to be audited by a reputable independent body due to a number of benefits this can provide. A non statutory audit report can help businesses comply with tax or banking obligations, can act as a financial health check and flag up any potential issues or areas for improvement. Our audit report will provide an independent opinion on these aspects to meet regulatory and other stakeholder requirements.
Whether you seek auditing services, company secretarial support or tax planning advice, please call us on 020 7408 4442 for a free and informal meeting with your nearest Perrys accountant, Central London or Kent.