PracticeAuditSmall company audit exemption is ‘close’

Small company audit exemption is 'close'

Audit exemption on small intermediary companies such as IFAs only months away from an agreement

Small intermediary firms are only ‘months’ away from having the requirement
on auditing their accounts scrapped in line with other small companies,
according to the Association of Independent Financial Advisers.

The Financial Services Authority and the AIFA have been locked in discussions
for several months with a view to removing the requirement on small intermediary
firms to audit their accounts, however, Chris Cummings, director general of the
AIFA said that both parties were closing in’ on an agreement.

‘Every regulated IFA firm has to complete online reporting called the
regulated mediation activity report that details the type of business and its
finances.

‘Removing the audit requirement would considerably cut reduce the regulatory
burden on IFAs and allow us to take advantage of the exemption in line with
other small companies.’

Under Companies House rules, small companies with a turnover of less than
£5.6m or a total balance sheet of £2.8m or less in any one year are exempt from
the requirement to submit – although this figure can reduce to £1m depending on
the company type – providing they have an average of 50 employees or less.

The exemption does not currently apply to financial services firms, however,
FSA rules stipulate the accounts of all financial firms must be audited.

Callum McCarthy, FSA chairman, and Kari Hayle, FSA director of finance,
strategy and risk, have been leading the discussions with the AIFA as well as
the Office of Fair Trading to see if such a move would be possible.

During a question and answer session at the City watchdog’s annual public
meeting, McCarthy said the exemption would ‘lighten the load’ and cost of
regulation on smaller firms.

Related Articles

PwC replaces EY as Domino's auditor

Audit PwC replaces EY as Domino's auditor

6d Alia Shoaib, Reporter
The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

Audit The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

2w Carl Johnson, Stephensons
BDO holds off Big Four to retain top position as AIM auditor

Audit BDO holds off Big Four to retain top position as AIM auditor

2w Alia Shoaib, Reporter
FRC urged to fine Big Four firms penalties over £10m

Audit FRC urged to fine Big Four firms penalties over £10m

4w Alia Shoaib, Reporter
EY to audit Standard Chartered bank

Audit EY to audit Standard Chartered bank

1m Alia Shoaib, Reporter
KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

2m Emma Smith, Managing Editor
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
Top 50+50: Firms post significant growth in new tax and audit rankings

Audit Top 50+50: Firms post significant growth in new tax and audit rankings

2m Emma Smith, Managing Editor