When is an Audit required for a company?

An audit is essential for companies that meet the criteria set out by the government. These criteria can cover the majority of companies that operate in the UK, depending on their turnover, assets, and the number of staff they employ.

• Read more: What is an Audit and why is it important?

What is the audit threshold for a company?

Private limited companies must be audited for every financial year if they meet two of the following criteria in that year:

• They generate turnover greater than £10.2 million.
• The value of their total assets exceeds £5.1 million.
• They employ more than 50 people.

Companies or bodies requiring an Audit regardless of threshold

There are also specific company types which must have an Audit for any financial year in which it has been:

• A public company (excluding dormant public companies)
• A subsidiary
• Any corporate body whose shares have been traded within a regulated market
• A company working in the insurance market, or an authorised insurance company
• A company that issues e-money (electronic money)
• A body that deals in pensions or labour relations
• A company involved in banking
• An organisation whose name appears in the “special register” under the Industrial Relations act 1971
• An organisation that funds a master trust pensions scheme
• An investment firm regulated by MiFID (Markets in Financial Instruments Directive)
• A company regulated by UCTIS (Undertakings for Collective Investment in Transferable Securities)

Companies or bodies which meet any of the above criteria must be audited regardless of whether or not they meet the audit criteria for turnover, assets or people employed. This is why it’s important to seek professional advice from a qualified auditor or legal professional if you are unsure of your audit status.

When to seek advice on your company audit situation

As you can see, the Audit threshold is not obvious for all companies. If your company does not yet conduct an independent Audit, we strongly recommend checking with a qualified auditor or legal professional. It is very important to work with a reputable auditor in order to avoid audit failure.

The Shorts Audit team provides meaningful advice at a strategic level, as well as assurance and advice relating to compliance with regulations. Speak to our team today if you require assistance.

• Learn more: The Shorts Audit Promise