PracticeConsultingCompany Law Review recommends threshold for full audit to be raised to £5m

Company Law Review recommends threshold for full audit to be raised to £5m

Full statutory audit should be abandoned for companies with a turnover of less than £4.8m, while those between £1m and £4.8m should only need an independent financial review.

That was the recommendation of the Department of Trade and Industry independent review panel into company law which yesterday published its latest consultation document.

Company Law Review project director Jonathan Rickford said: ‘We have suggested that the audit requirement should be relaxed. Companies with a turnover under £1m should have no audit requirement imposed. For those mid-sized companies – with a turnover of between £1m and £4.8m – we suggested an independent financial review which would be less in depth and cheaper than the full audit.’

The audit exemption is just one of several reforms tackled by the review group, which was briefed to ‘think small first’.

Other issues considered by the group include extending the right to sue auditors for negligence for future shareholders and creditors who rely on company accounts for investment decisions.

It also recommends an equally radical plan to allow auditors to agree a cap to their liability.

Call for auditors’ liability to be extended to non-shareholders, but damages payouts capped

Auditors’ liability cap proposals don’t go far enough, says instituteww.dti.gov.uk/cld/review.htm

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer