PracticeConsultingAudit limit to be pushed to maximum

Audit limit to be pushed to maximum

Thousands of companies could soon be exempted from the statutory annual audit if the government accepts recommendations expected to be made by the company law review in the next few weeks.

Its long-awaited proposals are expected to recommend the government raise the audit exemption limit to a turnover of Pounds 4.8m – the European Union maximum.

The move will put pressure on the government to act on its commitment of over a year ago to bring in the new threshold. The current threshold is £1m.

To ensure some assurance is available to companies exempt from audit, the Review has proposed the independent professional review, a ‘lightweight’ and less costly form of assurance.

David Wood, deputy director of auditing and accounting services at ICAS, said: ‘The government can move reasonably soon if it wants to. It’ll probably be a one-step move. Either they will announce the audit threshold hike with no provisions, or they’ll announce it [and IPR] together.’

Many accountants also support the idea. However, there are opponents, including Jonathan Beckerlegge, chairman of the audit committee at the Association of Chartered Certified Accountants.

He said: ‘I’m expecting an increase. But personally I hope that Patricia Hewitt is confident enough to think again. It’ll be a disservice to the community.’

Links

It’s a case of audit or nothing

ACCA deals further blow to IPR

Banks will continue to demand audits

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