SMEs pay for audit shake-up
Ministers have admitted government plans to shake up UK auditing and accounting following US corporate accounting scandals will cause significantly higher audit costs for smaller companies.
Last week’s interim report which was drafted by an expert panel chaired by competition minister Melanie Johnson states: ‘One potentially significant impact will be the fact that smaller companies will face higher costs of audit, even if they are excluded from any changes to the regulatory regime.’
The statement appears to contradict the government’s philosophy of ‘think small first’ as part of its goal to modernise UK company law. But it lays the onus on regulators saying it will be crucial for them to ‘consider carefully the impact on smaller companies.’
Neil Hamper, financial affairs chairman at the Federation of Small Business, said: ‘Any increase in costs being driven by the government is to be thoroughly deplored. It flies in the face of deregulation.’ Much of the government’s review has focused on larger listed and private companies.
Quoted Companies Alliance chairman John Pierce said: ‘Small companies have suffered disproportionately. All companies have been tarred with the same brush whether in the US or UK, big or small.’