For financial years that begin on or after 1 January 2016
A Statutory Audit is an independent examination of a company’s Statutory Accounts and is carried out in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in preparing the Financial Statements.
Your company may qualify for an audit exemption if it has at least 2 of the following:
- an annual turnover of no more than £10.2 million
- assets worth no more than £5.1 million
- 50 or fewer employees on average
The previous rules (last updated after 1st October 2012) you will not require an audit if you are a private limited company and meet at least two of the following size criteria:
- your turnover is less than £6.5m
- your assets are less than £3.26m
- you have less than 50 staff
- Any member of group of members (members being shareholders), not less than in aggregate than 10% in nominal value of the company’s issued share capital, lodge a formal request that an audit be carried out, no later than one month before the end of the company’s year end.
- If the company was at any time during the financial year either i) a public company, ii) a banking or insurance company, iii) an e-money issuer, iv) a MiFID investment firm, v) a UCITS management firm or vi) carries on insurance market activity.
- If the company at any time during the year part of a group or a group requiring an audit.
- You will receive an audit report commenting on whether the accounts materially show a true and fair view of the activity during the accounting period.
- Potential highlight and identification of any potential areas of internal control or process weaknesses in your business and advise you on appropriate remedial action.
- You have a registered auditor professionally documented basis for future finance applications, reports etc.
- You have peace of mind of knowing your accounts are in full compliance statutory requirements.
- The overall image and reputation of your business is greatly enhanced by your being able to present audited accounts to your investors, bank or other third parties.