Firm reveals smart approach to avoiding costly audits this year

Nov 28, 2012

Oxfordshire and Buckinghamshire based accountancy firm Whitley Stimpson is offering small to medium sized enterprises (SMEs) the opportunity to avoid a costly audit this year. The firm aims to help companies (including LLPs) adopt a smart response to new regulations from the Department for Business Innovation and Skills (BIS) surrounding eligibility for exemption from audit by moving their accounting year end date from 30th September 2012 to 1st October 2012. This simple change will ensure more SMEs remain exempt from the new regulations for this year, avoiding costly audit fees.

“By simply changing their 30th September 2012 year end date by one day, companies can make significant cost savings this year by ensuring they qualify for audit exemption,” explains Nick Bullen, Partner, Whitley Stimpson. “We remain committed to helping our clients to reduce their overheads through intelligent, practical accounting. Transparency is key to building long-lasting client relationships, and highlighting this straightforward solution to avoiding an expensive audit is just one of our recommendations for lowering overheads and maximising profits.”

Entitled ‘Audit exemptions and change of accounting framework’, the recent BIS paper outlines the government’s revisions to the audit exemption threshold and its proposals to allow 36,000 more companies greater flexibility to change their accounting framework. SMEs will now need to subject their annual accounts to an audit but only if they exceed two from three criteria for small company accounts (previously this was one from three). These are: if the company has more than 50 employees, a balance sheet total exceeding £3.26m. and a turnover exceeding £6.5m.

Further changes relate to subsidiary companies of groups of companies including where the subsidiary company is part of a group with a parent company in the EU. Provided those subsidiary companies themselves meet the above thresholds they will now be able to avoid a statutory audit provided their parent company guarantees their liabilities – it is estimated that 83,000 such companies will benefit from audit exemption and a further 67,000 dormant subsidiary companies of groups will also benefit.

Meanwhile, companies that currently prepare their accounts under international standards will be able to change their accounting framework to UK GAAP, as long as they have not moved to UK GAAP in the previous five years.

“Any companies that require clarification or guidance on the new regulations are welcome to call me for advice,” concludes Nick “I can provide insight on how the regulations will affect businesses moving forward, and offer concrete suggestions on how companies can negotiate the regulations to best effect.”

Whitley Stimpson’s Nick Bullen can be reached on 01295 220911