Swindon-based chartered accountants Banks has welcomed new rules which will exempt many firms from having to undergo an audit.
Business Secretary Vince Cable recently launched proposals to reduce auditing and reporting requirements – a move which would enable 36,000 firms to now choose whether or not to be audited.
Banks director Neil Elsden, pictured, said: “We certainly welcome the changes, which will enable many more companies to make a commercial choice about whether or not to be audited, rather than being forced to comply.
“But we would counsel caution. While it may at first seem attractive to not have to undergo an audit – so saving time and money – there are benefits to being audited.
“Having an audit means an expert, independent and critical eye is cast over the business, which can be very useful in helping the owners and managers to ensure the businesses is being run effectively.
“Third parties – such as banks and suppliers – are also likely to have more confidence in a business which they know is being independently audited.”
The new regulations, which come into force for accounting years ending on or after October 1, 2012, mean businesses will be exempt if they meet at least two of three criteria: a turnover below £5.6m, a balance sheet of £2.8m, or 50 or fewer employees. The move brings into line mandatory audit thresholds with accounting thresholds.