Audit and Accountancy

Audit and Assurance

The turnover threshold which exempts most companies from a statutory audit was raised from £1 million to £5.6 million for accounting periods ending after 30 March 2004. The legal definition of small and medium-sized companies was also changed so that more companies are able to prepare accounts with fewer disclosures than for 'larger' companies. We are now able to offer a more flexible service and whilst companies can now decide whether or not to continue having an audit, there are a number of benefits associated with the audit process to consider:–

  • Assurance. An audit increases confidence in the reported figures. This may be of particular benefit to external shareholders.
  • Credibility. Adding an audit report to a set of accounts increases their credibility, which can help greatly when dealing with external organisations such as banks and other lenders. Some lenders may require an audit as a condition of a loan.
  • Advice. Time spent auditing enables us to better understand your business and as a result provide quality advice in many other areas.
  • Fraud. Fraud continues to be an ever-present part of business life. Whilst an audit cannot guarantee to detect all fraud it is an important tool in helping its prevention by acting as a deterrent to a potential fraudster.
  • Taxation. Tax law never seems to become any simpler! Without an audit, accountants would need to spend more time ensuring that you and your company conduct your affairs in the most tax efficient manner.

In the past, audits were seen only as the 'cost' companies had to pay for the privilege of limited liability.

Audits today, however, provide reassurance to shareholders, lenders and creditors that the annual accounts are reliable.

Not all companies are eligible for audit exemption and indeed some regulatory bodies require audited accounts.


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