Audit requirement

Audit requirement

Didn't find your answer?

Turnover £7m
Employees 1
Balance Sheet £300,000
Paul Hendley

Replies (5)

Please login or register to join the discussion.

avatar
By AnonymousUser
16th Apr 2007 17:45

Audit Threshold
Audit threshold for small companies is turnover no more than 5.6 balance sheet 2.8.
Hope that helps
Andrea

Thanks (0)
Euan's picture
By Euan MacLennan
17th Apr 2007 09:53

Yes
The company qualifies as small and hence, is entitled to the disclosure exemptions and to use the FRSSE, because it satisfies 2 (assets and employees) out of the 3 criteria, but it requires an audit because its turnover exceeds £5.6m.

Thanks (0)
Euan's picture
By Euan MacLennan
17th Apr 2007 11:43

Read s.249A properly
S.249A(1) says "... a company which meets the total exemption conditions set out below in respect of a financial year is exempt from the provisions ... relating to the audit of accounts in respect of that year."

S.249A(3) says "The total exemption conditions are met by a company in respect of a financial year if -

(a) it qualifies as a small company in relation to that year ...,
(b) its turnover in that year is not more than £5.6 million, and
(c)its balance sheet total for that year is not more than £2.8 million."

All 3 conditions must be satisfied - it is "and" not "or" - and your company fails condition (b). It needs an audit.

Thanks (0)
avatar
By Paul Hendley
17th Apr 2007 10:53

This is what I thought but............
Euan, this is what I thought but Companies Act 1985 states under section 249A and 249AA that 'Small companies do not have to have their accounts audited'!

Certainly not doubting you Eaun but a general concensus of opinion would be much obliged from other viewers.

Thanks

Thanks (0)
avatar
By User deleted
22nd Apr 2007 17:08

business activity
Paul. Out of quorisity, what is the business activity of your client?

Thanks (0)