Audit threshold could rise again
European directive could see companies with turnover under £6.72m avoid audit
The government has admitted that it could seek opinion, as early as this
summer, on whether to raise the audit exemption threshold yet again.
New directives from Europe give the UK the option to raise the level at which
companies no longer have to undertake an audit once more, and the Department of
Trade and Industry looks set to grasp at a potential further reduction in red
tape for business.
The fourth and seventh company law directives, under the steerage of internal
market commissioner Charlie McCreevy (pictured), would allow member states to
boost exemption thresholds by a further 20%.
The threshold was raised from £1m to £5.6m in annual turnover, as recently as
2004, to bring the UK into line with European regulations.
Companies with revenue of up to £6.72m per annum could now avoid the costly
assurance exercise.
A spokesman for the DTI said that agreement in Europe on the threshold rise
was likely to be reached this summer, and ‘the government would then consult on
the matter’.
But it could still be another two years before the directives were
implemented.