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.
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.
For financial years that begin on or after 1 January 2016 your company may qualify for audit exemption if it has at least 2 of the following:
- Annual turnover of no more than £10.2m
- Gross assets worth no more than £5.1m
- Average employees of 50 or fewer
- 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%
There are different criteria for groups, group companies and dormant companies.