Failing to be
audited when you should have been can result in legal action. Therefore, getting it right at the outset is essential.
The following companies always need to be audited:
- Non-dormant subsidiaries of public companies
- Subsidiaries, where the parent company needs to be audited
- Any company involved in insurance, banking or e-money
- Where the shareholders require an audit
- Where the directors require an audit
- Where the grant provider requires it
- Where the regulator requires an audit
- Where the constitution requires it
The following situations usually require an audit:
- Ahead of the sale of a business or an IPO
- When PE or VC money has been raised
- When the company has external investors
- To add credibility to the financial statements
- To add discipline and process to the company
- To highlight areas of weakness
For all other private limited companies that are not part of a group they will require an audit if the following thresholds are breached:
For financial years that begin after 1 January 2016 you may be exempt from being audited if the company breaches two or more of the following in two consecutive years:
- Annual turnover of more that £10.2m
- Assets more than £5.1m
- Average of 50 staff or more
Group thresholds are 20% greater than the turnover and asset thresholds of stand alone companies.
Charities have lower thresholds
- Annual turnover of more than £1m
- Assets more than £3.26m and their income exceed £250k
Charities registered in Scotland and N Ireland have different thresholds.
Should you be considering whether your company needs auditing then we would be happy to assist you to determine this. Please contact Andrew Millet on
[email protected] or on 020 8429 9245.