UK announces reduced auditing and reporting requirements for SMEs and subsidiaries
Sep 06, 2012
UK Business Secretary Vince Cable announced that the government plans to allow more companies to make a commercial decision about whether or not to have a statutory audit. The changes will exempt more SMEs and subsidiary companies from mandatory audits, and will make it easier for companies to move to UK GAAP from IFRS.
The new regulation will allow SMEs to obtain an audit exemption if they meet two out of the three following criteria: (1) no more than 50 employees, (2) no more than £3.26m on their balance sheet and (3) less than £6.5m in turnover. The government will also exempt most subsidiary companies from mandatory audit, as long as their parent company guarantees their liabilities.
The government will also allow companies that currently prepare their accounts under IFRS to move to UK GAAP, allowing them to take advantage of reduced disclosures.
The regulations are expected to be effective for accounting years ending on or after 1 October 2012.
For more information, see the press release on the BIS website.