John Selwood's Q&As
In this edition of Audit & Beyond John answers questions about reviewers’ reports on cold file reviews and revisits questions about the rejection of audited, filleted accounts.
Question: From everything I have read, I understand that when audited, filleted financial statements are filed at Companies House, no audit report should be attached. Instead, certain disclosures about the audit appear on the balance sheet. However, I have recently seen several companies have their accounts rejected by Companies House because the company has not claimed audit exemption or filed an audit report. I am now at a loss on how to respond, because I thought I had got it right. What have I missed?
Answer: You might not have missed anything. But then again, this is an area where there are some pitfalls – which helps to explain why this is the third time I have addressed this issue in my Q&As.
Despite these earlier Q&As, I am asked questions about this on a startlingly frequent basis. So, although you can read my previous Q&As on filleted accounts in the June 2016 edition and in the December 2015/January 2016 edition of Audit & Beyond, this Q&A will provide a more detailed analysis of the issues.
To regurgitate the basics: s444 of Companies Act 2006 has been amended by SI 2015/980 and does not require an audit report where the profit and loss is not filed, as permitted by that section. Using the s444 filing exemption is commonly referred to as filleting the accounts.
Filleting is only available to small companies and very many of these are being audited because of the delay in the audit exemption thresholds increasing in line with the small company thresholds.
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