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two out of the three
I was hoping for big changes in the criteria... this seems a very minor tweak and it seems hard to believe it will lead to a significant rise in the number of audit exemptions.
Re: two out of the three
The main class of companies that will now be exempt is property investment companies where you have for example a £4m property, maybe £200k in rent and zero staff - it is managed by a letting agent.
An audit for a company like that isn't difficult, but it is a completely pointless box ticking exercise. Anyone with an interest in the company is going to want to know the opinion of a chartered surveyor, not an auditor.
Subsidiary audits
To be honest it would be good to extend some sort of audit exemption to subsidiary companies. My firm audits a number of subsidiaries of ineligible groups and some of them are very small companies. One for example is a trading company with a turnover of 40K. The audit process and our fees are quite disporportionate.
Again this is another example of the stupidity of audit over-regulation over the last 20 years. They have gone way too far with regulation such that the Government is compelled to exempt almost everyone from it. What is the point of that? I say bring back the Auditors Operational Standard and Example 8!
Audit exemption
I welcome these changes - they have merely aligned the audit requirement with that of being able to be classified as a small business.
I consider the limits should have been reviewed upward by now to allow for inflation.
It must be remembered that shareholders can request an audit if required; external financiers could also make having an audit a requirement of the financial provision if they felt it was necessary.