Audit and Assurance Service

Often audit and assurance services are considered to be a regulatory burden, however, the value of an audit should not be underestimated, these can include:

1. identifying weaknesses in your accounting systems and controls, which once rectified can help to reduce the risk of fraud and error;
2. adding credibility to the annual report which can be very beneficial when the company or its owner are aiming to raise finance, or you are tendering for new business, or if you are planning on selling the company (as most purchases ideally want a pack that includes three years' worth of audit financial statements);
3. helping to maintain good relationships with suppliers, landlords and the Taxman; and
4. facilitates obtaining advice from your accountants, on matters they might only become aware of due to the audit process, this might be regarding, non-compliance with laws and regulations, or cost savings that you could exploring.

The default position in the UK is that all companies require a statutory audit. The directors need to make a positive decision to take advantage of audit exemption where the company is eligible under the Companies Act 2006, by making the appropriate statement on the Company's Balance Sheet.

Shareholders who have 10% or more of the nominal value of the share capital can still require an audit to be undertaken.

Before any decision is made to take advantage of audit exemption it needs to be considered where there are other reasons why an audit needs to be undertaken, such as being a requirement of the company's Memorandum and Articles of Association (very common if the company was formed before the mid-1980s), or being a requirement of a shareholders' agreement, a lease, a loan agreement etc.

The rules regarding the audit requirement of a company which is a member of a group are more complex, as are the rules regarding charitable company where a much lower threshold applies due to the provisions of the Charities Act.

However, most companies can be audit exempt under company law if they meet 2 out of the following three criteria for two consecutive years:

These thresholds have remained the same since 2016, however, legislation has now been passed to increase these thresholds substantially for accounting periods commencing on or after 6 April 2025. The new thresholds are:

Please contact us if you need further advice or if would you would like us to quote for an Audit, independent examiner's report on a charity, FCA or SRA Client Money Reports, or another type of assurance report.