PracticeConsultingProfession gives thumbs-up to audit threshold rise

Profession gives thumbs-up to audit threshold rise

Accountants and business representatives have reacted positively to today's announcement of an increase in the statutory audit threshold, further details of which are due to be announced by the government this afternoon.

Trade secretary Stephen Byers is due to announce the measure at a speech at the British Chambers of Commerce – details will appear on AccountancyAge.com shortly after 3.30pm.

He has indicated this morning that he will raise the threshold from its current level of £350,000 to a temporary level of £1m, followed by a further increase after the Company Law Review has been finished, to £4.8m.

There are detailed reactions in our special audit threshold feature area.

The Small Practitioners Association, representing smaller English ICA accounting practices, was the first organisation to respond, welcoming the move which it has been campaigning for. Its chairman, Peter Mitchell, said: ‘It will result in dramatic restructuring for the need for audit work. Smallprrivate businesses will be able to drop out of the auditing net as they will nolonger be required to undergo annual audits. It was imposed on small businessesas a bureaucratic exercise causing cost rather than benefit.’

A spokesman for the Federation of Small Businesses was rather more lukewarm in his response. ‘This isn’t new – Byers was talking last June about whether to go for £1m or £4.8m. When the government feels that it is under pressure, it makes an announcement to show that it is cutting through red tape,’ he said.

Teresa Graham, head of business services at Baker Tilly, and member of the Better Regulation Task Force, gave the move a cautious welcome but that it was disappointing that he appeared to have ‘passed the buck’ on the move up to £4.8m to the Company Law Review.

However, Gerry Acher, chairman of the English ICA audit faculty, said: ‘I am 100% supportive of this approach as will be the audit faculty. At the time the review was announced we were perplexed that this was taken off-line and not part of the Company Law Review. This is precisely what we said he should do.

‘But while I welcome this as a first move, I am worried that there are so many other areas of red tape that need tackling and audit is the most minor of them.’

Martyn Jones,national audit technical partner at Deloitte & Touche, said: ‘It is a very useful step. We were seeking the lifting of burdens. Generallythere needs to be more simplification for small businesses. There is stillscope to eliminate further burdens and complexities. In particular thecomplexities associated with abbreviated accounts should be abolished.’

Byers announces £1m audit threshold – for now

AccountancyAge.com special feature – Audit threshold

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer