The way forward
Ruth Ward joins faculty volunteers on an exploration of the brave new world of audit by choice.
Some changes to audit exemption thresholds come with a fanfare; some do not. When thresholds changed on 1 January 2016 some members may have been taken by surprise. Because, after a government consultation, the latest increases were confirmed in a written statement that was laid before the House of Lords on 26 January 2016 – members who would like a little more background on this will find it in a Q&A we featured in the March edition of Audit & Beyond.
Clearly, audit exemption is here to stay, which means that audit by choice will be the future for most UK companies – and auditors. So after the latest changes to audit exemption were confirmed, the faculty decided to broadcast a live webinar. I discussed the implications of audit exemption with faculty volunteers Nigel Hughes, managing director of Totteridge Associates and chair elect of ICAEW’s Practice Committee, and David Gallagher, technical director at MHA MacIntyre Hudson.
Before we join them on this exploration of those changes and what they might mean in practice, let's recap the details.
Small companies in the UK are exempt from audit, and that doesn't change when the definition of 'small' changes. Two of the three thresholds that mark the boundary between small and medium sized have increased for periods starting on or after 1 January 2016:
- turnover threshold has increased from £6.5m to £10.2m: and
- total asset threshold has increased from £3.26m and £5.1m; while
- the employee numbers threshold remains the same at 50 employees
This is an extract from an article in the May 2016 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.
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