The government will press ahead with its plan to align mandatory audit thresholds with accounting thresholds for small companies from 1 October.
In a press release issued on 6 September, the Department of Business Innovation and Skills confirmed that small businesses will not need to subject their accounts to an audit if they meet two out of the three qualifying criteria for small company accounts:
- Fewer than 50 employees
- Balance sheet total: no more than £3.26m
- Turnover below £6.5m.
Subsidiary companies will be let off mandatory audits if their parent companies guarantee their liabilities. Dormant subsidiaries - up to 67,000 in number - will no longer need to prepare and file annual accounts, provided they receive a similar guarantee.
In another related reform, companies that currently prepare their accounts under international standards will be able to change their accounting framework to UK GAAP provided they have not moved to UK GAAP in the previous five years.
Log into AccountingWEB to read a full run-down of the reforms set out in the BIS summary of consultation responses.
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.