Group Audits

Group Audits

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My company is a SME that is large enough to have its accounts audited. We own another company which is small enough to not need auditing (if it was a stand alone company).

Because it is a subsidiary company, does it automatically need auditing or can we submit abbreviated accounts with an acceptance of liability?

To add another variable, both belong to the same VAT group, where the group head company owns the large SME

Sorry if that sounds confusing.......

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By User deleted
26th Oct 2014 09:00

The subsidiary needs to be audited, however it can seek exemption under s.479A

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By TerryD
27th Oct 2014 09:43

There are two problems with S479, apart from all the paperwork involved. Firstly, the parent will be guaranteeing the subsidiary's debts existing at the year end for all time, and, secondly, the group accounts will have to be audited, so if this subsidiary is material to the group, then the auditors will have to carry out a substantial number of audit procedures on the subsidiary, albeit not a full audit. So the savings are limited. You can, of course, file abbreviated accounts for the subsidiary regardless of whether or not it is audited.

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