PracticeAuditTrinity tying us up with red tape.

Trinity tying us up with red tape.

When ICAS made known its feelings on the subject of raising the audit exemption threshold last month, it essentially created a trinity of opposition to the government's plans to cut the red tape burden for small companies.

The Scottish institute’s conclusion that the plan to raise the threshold from £1m to £5.6m was not in the public interest, and could damage the quality of accounting in the country, had already been voiced by ACCA, with former president Jonathan Beckerlegge claiming the proposals were ‘hard to comprehend’.

Even the ICAEW, which is normally quite reserved in its pronouncements on government activity, pointed to the ‘possible drawbacks’ of raising the exemption bar.

This level of opposition could prove quite tough for the government if it is truly listening to influential institutions.

Certainly many of the issues raised are genuine concerns – why is the government looking to reduce the number of companies needing audits at the same time as introducing new legislation to improve reporting standards?

But in the end the government may take the words of the three institutes with a pinch of salt.

ACCA, ICAS and the ICAEW are, like all institutes, bodies that exist to represent the interests of their members.

A great number of their members will be heavily involved in audit work.

It doesn’t take a genius to work out that if these proposals are passed then the amount of audit work available to their members will take a significant nose-dive.

With an estimated 66,000 extra companies no longer requiring the services of an auditor it could even, potentially, lead to a reduction in the number of members for the institutes and consequently their finances.

Now, while this may not have influenced the institutes when they made their statements on these proposals, it’s unlikely to have slipped the government’s attention when receiving comments.

It won’t look good for the institutes if they alone are opposed to the rise of the audit threshold, and only if their words are backed by similar concerns from other bodies with less to lose will they once again start to take on any significance.

Related Articles

PwC replaces EY as Domino's auditor

Audit PwC replaces EY as Domino's auditor

2d Alia Shoaib, Reporter
The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

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

1w 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

1w Alia Shoaib, Reporter
FRC urged to fine Big Four firms penalties over £10m

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

3w 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