The audit threshold was raised in July last year to Pounds 1m, and trade secretary Stephen Byers said he was considering raising the threshold as high as Pounds 4.8m, the European limit.
However, ICC said raising the audit threshold would be of no benefit to small and medium sized businesses and would hinder their ability to obtain credit.
Adrian Howells, director of marketing at ICC, said the independent professional review did not provide the required confidence for the business community.
‘Smaller companies will still need to provide audited accounts to ensure they can continue to compete.’ Howells said.
He added companies would need to prove they were financially sound when applying for credit and called for a ‘fair mechanism’ to be put in place.
‘The proposed changes do nothing to ensure that business has greater confidence in smaller companies,’ Howells commented.
The ICC comments follow an announcement by the ACCA today backing lenders in supporting the current Pound 1m limit, but rejecting the proposed Pounds 4.8m increase.
Earlier this month, the ICAEW council decided to withdraw its support for the IPR, and some of the UK’s biggest banks said they would continue to demand audited accounts from small businesses seeking finance.
The raising of the audit threshold is part of the government’s plans to cut red tape to encourage the growth of new business ventures, and to increase global investment in the UK economy.
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