Small companies remain unaware of new audit exemption: Eagle Consulting help explain the changes.

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Despite recent media coverage, many businesses may still be unaware of the changes in audit thresholds that allow more companies to qualify for audit exemption. With the end of the quarter fast approaching, and with it many fiscal year ends, now is the time to check that you are not paying for unnecessary audit services.

Eagle Consulting
Many businesses are unaware that they now qualify for audit exemption, which means they may be paying far too much for their year end accounts.

What’s changed?

In a press release issued last year, the Government stated that the rules for audit exemption thresholds for limited companies and LLPs would change. The changes apply to companies with financial years ending on or after 1st October 2012.

The old rules:

Previously, to be exempt from audit a ‘small’ company had to meet the following criteria:

  •     Annual turnover not more than £6.5 million
  •     Balance sheet total not more than £3.26 million

The new rules:

Any company that qualifies as a ‘small’ company in accordance with Companies Act 2006 will be exempt from audit provided they satisfy 2 of the following 3 criteria:

  •     Annual turnover not more than £6.5 million
  •     Balance sheet total not more than £3.26 million
  •     Average number of employees not more than 50

What does it all mean?

Companies that would previously not have qualified for audit exemption may now be eligible. For example, a company with an annual turnover of £6 million, but a balance sheet of £4 million, would not previously have qualified. If, however, that company has less than 50 employees it will now qualify for audit exemption.

This in turn means that many companies will be able to make significant savings on their year end accounting costs. Not only will they qualify for audit exemption, saving them the cost of an audit, they will also be able to take advantage of more competitive pricing available from other accountancy firms who do not offer an audit service. With the end of the quarter approaching, and with it the end of the financial year for many businesses, companies must ensure that they are aware of these changes and act accordingly to save any unnecessary financial outlay.

Businesses must, however, ensure that there are no other factors which might require them to have an audit. For example, if a company has bank borrowings there may be a requirement in the loan documentation to have an annual audit carried out.

Help is at hand...

Eagle Consulting are experts in providing bespoke accounting solutions to a wide range of businesses throughout the UK, including Management Accounting, Compliance, Treasury services and Payroll services. Their staff are highly qualified and experienced, their controls are robust and they provide quality services and reports. Where clients are required, or have chosen, to have an annual audit, Eagle Consulting provide a comprehensive pack for the auditors. Clients who have taken advantage of this service consistently receive few, and often no comments or adjustments from the auditors, such is the standard of Eagle Consulting’s work.

Established in 1993 Eagle Consulting now employs nearly 50 staff, including several accountants trained in the Big 4 accountancy practices, and are based entirely in the UK. Their expert team can provide weekly and monthly Financial Information and KPIs and can support clients with personal and corporate Tax Planning whilst ensuring all statutory requirements are met. Their client portfolio currently comprises over 700 companies nationwide and includes businesses from a wide range of sectors.

Eagle Consulting
15a Harbour Road, Inverness, IV1 1SY
0800 731 5368
info (at) eagleconsulting (dot) co.uk
http://www.eagleconsulting.co.uk

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Harry Hornby - Director
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