Audit Exemption - Byers 'plucks figures from air'
Red-faced government officials were forced on the defensive this week after it emerged their estimates of annual audit costs for companies are hugely exaggerated and inaccurate.
The development follows accusations from the profession that trade secretary Stephen Byers has been ‘plucking figures from the air’ in order to gain support for his proposal to raise the audit threshold from its current level of £350,000 to as high as £4.2m.
According to Byers, when he announced the measure in June, removing the requirement to have an annual audit would save a £1m turnover company £5,000 a year. He said the figure came from the Federation of Small Business.
But an FSB spokesman this week said that the figure was exaggerated and a more accurate estimate would be nearer £1,000. ‘I don’t know where it came from,’ he said of the £5,000 figure.
The episode will add weight to arguments that Byers is using the proposal as an ’empty gesture’ to counter criticism about the government overwhelming small businesses with red tape.
A DTI spokeswomen said the figure was quoted in ‘good faith’ but was unable to give an assurance that an amended figure would now be used.
ACCA’s small business spokesman, David Harvey, said: ‘I think it is extremely unhelpful for the government to quote such figures. There is far too much policy generated without any research whatsoever.’
The English ICA said it was collecting information from members in order to present more accurate information to government about the costs of audit to small businesses.