Do I Need an Audit?

As you can probably imagine “do I need an audit?” is a question we are asked a lot.

In the most general terms the answer will be “yes” if your company meets two of the following three criteria:

1. During this and the last financial year your turnover exceeded £10.2m
2. During this and the last financial year your business’ assets exceeded £5.1m
3. During this and the last financial year you had more than 50 employees

There are two exceptions:

1. Your company is a subsidiary of a group. Unless the entire group meets the small group criteria.  This small group criteria is the same principals and numbers as described above.  (Note a subsidiary company of a group that is not small, may still be exempt if the parent company agrees to guarantee the liabilities of that company)
2. You are a charity (charities have different criteria) and you can find out more about how we help charities here

The reason that we say that is the answer in ‘general terms’ is that even if your turnover, assets and headcount are below the thresholds above, you may still need to have a statutory audit if:

• You operate within a regulated industry sector (Examples of regulated businesses include financial services providers, charities, friendly societies and solicitors. At Rowleys, we can provide specialist audit services for these sectors.)
• Your shareholders have requested an audit by serving notice under Section 476 of the Companies Act 2006
• Your bank or other lenders have requested an audit of your financial statements

While these are the ‘official’ reasons for having an audit, there are also several commercial benefits you may also want to consider before you decide whether you need an audit or not:

• If you are planning to sell your business, the results of you audit may help you secure a higher price
• If you are looking to secure further investment, an audited set of accounts could be the final piece of persuasion your preferred lenders need to make the right decision
• If you are looking to begin a new trading relationship (particularly with a government organisation), they may insist on your being able to provide several years of audited accounts

If you’d like to find out more about our approach to audit (and the reasons we are confident we always deliver much more than just an audit), please click here.

If you still have more questions about your own audit position, please don’t hesitate to email us at post@rowleys.biz and we will be happy to arrange a time for a more detailed discussion.