At an APB board meeting on Monday, the UK’s auditing standard setters were putting the final touches to in-depth research, due to be released in October, on whether to introduce an independent professional review for those companies now exempt from the annual statutory audit.
A total of 20 accountancy firms have applied the APB model to 20 companies to find out the cost-saving benefits and its effectiveness.
Jon Grant, APB technical director, said: ‘We are moving ahead with the report. There’s a little bit of redrafting to do and we want to get a bit more input and then it goes to the DTI as well as being made public.’
The idea for an IPR was originally mooted by former trade minister Stephen Byers as a result of the hike in the statutory audit threshold, exempting companies with a turnover of £1m or less. Byers also indicated he intended to raise the threshold to £4.8m at a later date.
Government ministers and the Department of Trade and Industry will consider the findings in connection with the results from the three-year long company law review.
Enthusiasm for an IPR received a blow in February when the ICAEW, which had supported the proposals to replace the audit for small companies with the lighter-weight assurance, proposed a motion which led to a U-turn.
Some of the UK’s biggest lenders have also indicated they will continue to demand audited accounts from small businesses seeking finance, despite the increase in the audit threshold.
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