I suspect the answer to this questions is yes, but I've never quite been sure.
Company A owns Company B owns Company C.
Company C trades and is medium sized. Company A has some loan notes, is medium by virtue of the group, prepares consolidated accounts. A and C have audits.
Company B is dormant and has no transactions at all, nor has it for several years. C doesn't issue dividends to B (at least not for a good few years now).
In my mind, B is dormant, albeit a medium sized dormant so I prepare FRS102 (full) accounts.
Does B need an audit?
What I've read suggests so, but its a bit perverse? We've been slapping one on, but the audit is comedy as no balances move, and the cost of investment isn't impaired.