Audit exemption

On 6th September the government announced significant changes to company and LLP audit and reporting requirements. As noted above, the changes remove the need for many more companies and LLPs to have an audit and they apply to financial years ending on or after 1 October 2012. In brief, the changes introduced:

• align audit thresholds with small company thresholds, meaning that virtually all companies and groups that qualify as small can choose whether they wish to have an audit or not; and
• allow qualifying parent companies and their subsidiaries to decide whether or not to have a subsidiary audit, regardless of its size. Instead, parent companies can opt to provide a statutory guarantee over the subsidiary's liabilities. Dormant subsidiaries will also be exempt from the requirement to prepare and file accounts, subject to the provision of a similar guarantee.