Audit Exemption Threshold Increases

29 January 2016

Concerns by the Audit profession regarding the increase of audit exemption limits would lead to more instances of poor financial reporting were rejected by the Government.

Companies will not be required to have an audit for financial years which start on or after 1 January 2016 if two out of the three following criteria can be met for two consecutive financial years:

• Turnover - less than or equal to £10.2 million
• Balance Sheet Total - less than or equal to £5.1 million
• Number of Employees - less than or equal to 50

However it is thought that potentially exempt companies will choose to have an audit for a number of reasons:

• To give shareholders/investors confidence
• To satisfy tender requirements
• To ensure reliable financial reporting
• To promote sound financial practice
• To protect against mismanagement, fraud and tax evasion

Read more on the AccountingWeb article.