My client is an American company with a UK subsidiary. It is not a parent company, nor is its ultimate parent listed. It clearly meets the size criteria for audit exemption as a standalone company, and qualifies to file abbreviated accounts.
I have spoken to some experienced auditors, and conventional wisdom seems to be that such a company does not require an audit. However, the Companies House guidance seems to suggest otherwise, or at best is ambiguous:
3. Are all types of small companies eligible for the exemption?
No. Audited accounts must be delivered to Companies House if the company falls into any of the following categories:
(a) A parent company or subsidiary undertaking (unless dormant for the period during which it was a subsidiary) except where:
* the group qualifies as a small group or would qualify if all the bodies corporate in the group were companies; and
* the turnover for the whole group is not more than £5.6 million net or £6.72 million gross; and
* the group's combined balance sheet total is not more than £2.8 million net (£3.36 million gross).
This appears to imply that in the case of a subsidiary company, one must consider the size of the group: the worldwide group would not be within the limits. The accepted wisdom that no audit is required presumably implies that only the size of the UK group need to be considered, but I am having difficulty in finding authority for that.
Can anyone help?