Some companies and LLPs are not required to have an audit if they are “small” as they can take advantage of the Section 477 audit exemption. A standalone company will qualify as small unless it exceeds two of the three following size criteria for two years in a row:
|Average number of employees
||Not more than 50
If the company or LLP is in a group, the whole worldwide group must be “small” for the entity to qualify for the Section 477 audit exemption. Find out more here.
As there are numerous advantages of having an audit, many companies will opt to have an audit even if an exemption is available.
Advantages of an audit
These advantages include:
- Giving shareholders and directors peace of mind that the financial statements are free from material error and give a true and fair view
- Identifying internal accounting system weaknesses and recommend practical ways to improve
- Providing assurance to potential investors regarding the financial performance
- Assisting with complicated transactions and ensuring they are accounted for and disclosed correctly
- Highlighting upcoming changes in company law, accounting standards and tax legislation and ensuring our clients are prepared
- Providing greater credibility to banks, customers, suppliers and HMRC
- An audit can be a requirement for banks when applying for a loan and will improve the chance of raising finance
- For customers and suppliers an audit improves trust for both parties and provides greater assurance over business processes and working capital
- An audit reduces the chance of an HMRC inspection (although making claims still increases the probability of there being an inspection) and increases the reliability of corporation tax returns
- Improving the credit rating of the business.
At Buzzacott, audit work is tailored to the risks in the business. We will provide you with confidence that the financial statements are materially correct and reflect fairly on the business. We are the largest single office accountancy practice in the United Kingdom and have all the resources a business would ever need all in one place to ensure value is maximised.
If you think you need assistance, just get in touch.