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A firm having paid more out of its bank account than it has put in it
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The Permanent File


Audit Requirement Threshold

Businesses trading as limited company with annual turnover more than £6.5 million and /or business assets in excess of £3.26 million, their financial statements are required to be audited by registered auditors under the UK company law.

Companies with sales and business assets less than the audit threshold mentioned above are exempted from audit. Normally startup companies are audit exempt. Concise Accountancy offers fixed fee accounts packages to small companies which include taking care of company accounts and corporation tax return.

Registered Auditors

The company must appoint a registered auditor and the auditor will assess the company accounts and express their opinion on whether the accounts give a true and fair view.

At the initial stage of appointment, the auditor will gather information for the permanent file.

The Permanent File

The permanent file usually contains documents and matters of continuing importance of clients’ businesses which will be required for more than one audit.

Below are some of the documents and records auditors would keep in their permanent file.

Statutory material

Documents governing the conduct, accounts, and audit of the business or the enterprise. For example, a copy of the Financial Services Act if the business is regulated by the Financial Services Authority (FSA) and other legislations applicable to the business.

The rules and regulations of the company

For companies, this means the Memorandum and Articles of Association. For partnerships, it means the partnership agreement. For sports clubs, the club rules, and so on.

Copies of documents of continuing importance and relevance to the auditor

  • Letter of engagement and minutes of appointment of the auditor. This is particularly important in non-statutory audits as it embodies the auditor's instructions.
  • Trade, license, and royalty agreements; entered into by the client.
  • Debenture deeds.
  • Leases
  • Guarantees and indemnities entered into.
  • Copies of Annual returns

Addresses of the official office and business

The company’s registered office address and all other premises, with a short description of the work carried on at each branch.

An organization chart

Detailed of the principal departments and sub-divisions thereof with a note of the numbers of people involved.

The names of responsible officials and staff within the organization structure. Extra details should be given for accounting departments.

List of books and records

The place where they were kept. Names, positions, specimens of signatures and initials of persons responsible for books and document should also be included. Account codes and classifications should also be held.

An outline history of the organization

Special mention must be made of the history of Reserves, Provisions, Share Capital, Prospectuses, and acquisition of subsidiaries and businesses. There should also be a record of important accounting ratios.

List of accounting matters of importance

Accounting policies used for material areas such as stock, work in progress, depreciation, research and development expenditure in the accounts.

Internal Controls

Notes of interviews and correspondence regarding internal control matters and all past letters of weakness.    

The business structure within a group and associated companies

A note of the position of the company in the Group and of all subsidiaries and associated companies with holdings therein.

Clients' Internal Audit and Accounting Instructions

Details of shareholders and directors

A list of the directors, their shareholdings, and service contracts normally this information contained in the Annual Return of the company which can be downloaded from Companies House


A list of the company's properties and investments with notes on verification.

Company’s advisors

A list of the company’s advisors such as bankers, merchant bankers, stockbrokers, solicitors, valuers, insurance brokers etc.


A list of company’s insurance

Normally the permanent file is updated on a yearly basis during the audit. Businesses should feel free to provide any of such information listed above to enable auditors to complete their audit assignments. Remember that the information contained in the permanent file is handled with strict confidence.

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No more late filing penalty!

Concise Accountants take care of all my company statutory requirements. They deal with everything for me for a fixed fee. Really good deals for newly start ups businesses.

I am happy that I do not have to deal with Companies House and tax office matters any more, I have more time to serve my customers.

Mr. John Paulo, Director