Limited company is required by the UK company law to have their company accounts audited by a Registered Auditor unless they are entitled to audit exemption.
Audit exemption threshold
Audit exemption under the Company Law means your limited company accounts are not compulsory to be audited by a Registered Auditor.
To claim audit exemption, your company must meet the following criteria.
|Audit exemption threshold||Company accounts begin 1 Jan 2016||Company accounts prior 1 Jan 2016|
|Sales less than||£10.2 million||£6.5 million|
|Business assets worth less than||£5.1 million||£3.26 million|
|No. of staff less than||50||50|
Your company must engage a Registered Auditor to audit your company financial statements and accounts if your sales and business assets worth is valued more than the audit exemption threshold.
This aside, however, your bank or major creditors or investors may require your company accounts to be audited under their terms of lending or loans to your company regardless the audit exemption rules.
Also, take note that your company shareholders whom hold more than ten percent of your issued share capital could request your company accounts to be audited, in this situation your audit exemption entitlement is waived.
Dormant Company quality for audit exemption
Dormant company is qualify for audit exemption and is eligible to file dormant account with Companies House. Your dormant company must not be part of a group of companies that required audit by law.
Businesses do not qualify for audit exemption
Limited company with the following principal business activities are not qualify for audit exemption by defaults. In other words, your company must submit audited company accounts with Companies House.
- A public limited company.
- A company is parent or a subsidiary a group, with the group turnover exceed the audit threshold.
- An authorised insurance company or carrying out insurance market activity.
- A company involved in banking or issuing e-money.
- A Markets in Financial Instruments Directive (MiFID) investment firm or an Undertakings for Collective Investment in Transferable Securities (UCITS) management company.
- A corporate body and its shares have been traded on a regulated market in a European state.