This week the government has decided that the statutory audit threshold will increase in line with the new limits. The new limits are set out below. In order to remain exempt from an audit, companies must stay below two out of the three limits for two consecutive years.
This means from next year approximately 7,000 more businesses will be exempt from the requirement to have a statutory audit. The government estimates that, out of these, 5,000 will potentially continue with having an audit for a number of reasons.
Reasons to continue with a voluntary audit include the fact that it gives comfort over the accounts to business owners as well as outside shareholders, banks and lenders, customers, suppliers and potentially prospective buyers of the company.
The new limits are:
- Turnover: not greater than £10.2m (previously £6.4m)
- Balance sheet total: £5.1m (increased from £3.26m)
- Number of employees remains the same at 50
There is also an option to early adopt these for accounts presentation purposes, but that does not change the audit limits currently in place.
If your business will be affected by these changes or you are unsure, please call Chris Johnson (Corporate Services Director) on 01254 679131 to discuss the options available to you.