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11 Apr 2011
AUDITS for small to medium-sized enterprises have been stridently defended by the ICAEW.
Michael Izza, chief executive of the professional body, said audits stoke confidence in modest-sized companies and provide significant value.
Further reading
He was responding to Vince Cable's call to lower audit thresholds, the most recent manifestation of which is an employee number test that could allow the exemption of outfits with 50 or fewer employees.
One further criterion is needed to qualify; either a turnover below the current threshold of £6.5 million, or a balance sheet total lower than £3.26 million.
The employee number test will bring UK rules in line with other EU members, but Izza warns many additional companies will be exempted as a result, such as service industry outfits with limited assets.
Izza said the government "instinctively wants to be deregulatory", claiming there are a number of barriers to loosening audit requirements. He pointed to the difficulty of amending EU law and said the EC green papers on audit and corporate governance are the immediate policy priorities.
For more visit Izza's blog here.
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Visitor comments Add your comment
Standards for SMEs audit
It has become burdensome to conduct audits generally. Whilst stringent measures would satisfy the regulators, it is causing serious hardship to practitioners conducting audits. Something has to be done to remove the burden of conducting audits. There has to be a balance that would be benefical to all. The SMEs standards is an excellent example of how a balance can be obtained. A Financial Controller recently indicated to me that audits have now become more paper work to ensure compliance rather than adding value to the company.
Posted by: Sarah Pariag, 11 Apr 2011 | 13:32