Should you have an Audit - or not?
Private companies that meet 2 of the 3 criteria of turnover up to £6.5 million, balance sheet total up to £3.26m or up to 50 employees do not need to have an annual statutory audit.
Initially, this seems like very good news for smaller to medium sized companies but there may still be advantages to having an independent audit of company accounts.
Some points to consider are:
- Audit can provide comfort for shareholders, particularly those who are not directors.
- Providers of finance may take reassurance from an independent check on financial statements.
- Suppliers may need audited figures before providing credit facilities.
- Audited accounts may be of assistance if a company is being sold.
- Without an audit, companies lose the benefit of an independent check on their financial strategy. Also, although the audit process is not specifically designed to identify fraud, there must be an increased risk of fraud going undetected.