PracticeConsultingReview calls for audit threshold hike

Review calls for audit threshold hike

Trade secretary Patricia Hewitt has promised to 'study carefully' the findings of the Company Law Review, published this morning, which includes a recommendation to raise the audit threshold.

The review’s final report marks the end of a three-year project aimed at devising a modern framework of company law to replace the current system, much of which was developed in the days of Queen Victoria.

Put together by a steering group consisting of business, legal and government experts, it recommends a radical simplification of the law for small companies aimed at cutting red tape.

Part of this includes a recommendation to raise the audit threshold from its current level of £1m – possibly to the European Union level of £4.8m.

The report also recommends that directors and employees should have wider statutory duties to assist auditors, and that auditors should be allowed to limited their liability to the company and third parties.

The report also calls for a statutory statement of directors’ duties to encourage responsible and informed decision-making.

Welcoming publication of the report, Hewitt said: ‘Years of neglect have left us with an archaic, Victorian system that is holding British business back. We want to bring British company law into the 21st century.’

She added: ‘I am grateful to all who took part in the review and will study its recommendations carefully.’

A longer story on the publication of the Company Law Review will appear later.

Links

Hewitt to announce radical legal shake-up

Company law review – Eye on UK Plc

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