> Statutory Audits

Statutory Audits

There is much confusion around audits even by business people who have them annually. Simply put an audit is a review of a business’s books and records, transactions, systems and controls.

Statutory Audits - An audit is a review of a business’s books and records, transactions, systems and controls.

From the initial review, the auditor forms an opinion that is relayed in the auditor’s report. An audit is not an investigation to prove wrongdoing.

The criteria for a statutory audit, per the Companies Act 2006, changed in October 2012 and brought them into line with the criteria for small companies. So, if you meet the definition of a small company then you will generally be exempt from an audit. The criteria are as follows:

From October 2012 your company is a small company and exempt form audit if it meets two of the following:

  • Turnover < £6.5m
  • Gross Assets < £3.26m
  • Employees < 50

The company may still need an audit if:

  • It is required per the memorandum and articles of association
  • It is requested by shareholders owning at least 10%

Prior to October 2012 an audit was required if one of the following was breached:

  • Turnover < £6.5m
  • Gross Assets < £3.26m

There are different criteria for groups, group companies and dormant companies.

Nathans and Joe Bannister FCCA both hold the auditing qualification and auditing certificate and are well placed to discuss your auditing needs should you need one for whatever reason.

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