Do You Need an Audit?
Benefits of an audit:
- Increased credibility for
- Shareholders
- Financiers, such as banks
- Creditors and suppliers in general
- Potential customers in gaining contracts
- Inland Revenue
- Possible deterrent to fraud
- Possible unearthing of fraud
- Assisting any business sale and providing basis for due diligence process.
Please see below for both the Company and Charity Audit thresholds;
Company Thresholds:
| Existing Thresholds (A/cing periods beginning on or before 5/4/08) | No Change | New Thresholds (A/cing periods beginning on or after 6/4/08) | |||
| Turnover (not more than) | Balance sheet total* (not more than) | Number of employees (not more than) | Turnover (not more than) | Balance sheet total* (not more than) | |
| Audit Required? | An audit is required if the company breaches 1 of the 2 small company threshold limits for either Turnover OR Balance sheet total* | ||||
| Small Company | £5.6m | £2.8m | 50 | £6.5m | £3.26m |
| Small Group | £5.6m net (or £6.72m gross) | £2.8m net (or £3.26m gross) | 50 | £6.5m net (or £7.8m gross) | £3.26m net (or £3.9m gross) |
| Medium-sized Company | £22.8m | £11.4m | 250 | £25.9m | £12.9m |
| Medium-sized Group | £22.8m net (or £27.36m gross) | £11.4m net (or £13.58m gross) | 250 | £25.9m net (or £31.1m gross) | £12.9m net (or £15.5m gross) |
* Balance sheet total - this can also be described as gross assets, which is the aggregate of fixed assets and current assets
Accounting periods beginning on or after 27/2/07
| Effective Y/e 28/2/08 thro' to Y/e 28/2/09 | UN-Incorporated Charity | Incorporated Charity |
| Total Exemption | Gross Income < £10k | Gross Income < £90k |
| Independent Examination Accountant's Report |
G.I £10k-£500k N/A |
N/A G.I. £90k - £500k |
| Audit | G.I. >£500k OR G.I.>£100k & G.A.>£2.8m | G.I. >£500k OR G.A. >£2.8m |
Accounting periods beginning on or after 1/4/08
| Effective Y/e 31/3/09 | UN-Incorporated Charity | Incorporated Charity |
| Total Exemption | Gross Income < £10k | Gross Income < £10k |
| Independent Examination | G.I £10k-£500k | G.I. £10k - £500k |
| Audit | G.I. >£500k OR G.I.>£100k & G.A.>£2.8m | G.I. >£500k OR G.I.>£100k & G.A.>£2.8m |