Jonathan Beckerlegge, chairman of ACCA’s audit committee, said: ‘ACCA welcomes any proposals to reduce unnecessary burdens on small and medium sized enterprises, which are the cornerstone of a successful economy. At the same time, we believe that the audit ranks fairly low in the list of SME concerns.
‘ACCA has consistently pointed out the benefits of the audit, both in giving SMEs the credibility which they need to raise finance and in protecting the interests of creditors.
‘The government’s company law review is placing a new emphasis on the interests of stakeholders other than shareholders and the eventual abolition of the audit requirement for all small companies would do nothing to protect those interests.
‘One of the government’s own ‘principles of good regulation’ is consistency. The statutory audit, clearly defined by auditing standards and backed up by the monitoring of registered auditors, has ensured a consistency and reliability in financial reporting which would not otherwise have existed and which now risks being lost.
‘The success of the proposals will depend heavily on the scope of the new ‘independent professional review’ which may eventually replace the audit for companies in the £1m to £4.8 m turnover range.’
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