Matthew Stallabrass ACA, audit partner, corporate team at Crowe Clark Whitehill, reviews the potential changes to the audit and regulatory environment in a post-Brexit world
As powers are returned from Brussels to the UK, Brexit may present a significant impact for audit, including both the audit thresholds and the regulation of audit firms.
Audit thresholds have been steadily rising in recent years with the most recent change increasing the turnover threshold to £10.2m for years commencing on or after 1 January 2016. Ultimately the audit threshold is linked to the small company limits, which are currently set by the EU. Member states have the power to impose a lower threshold than the small company limits, but not a higher one.
By aligning the audit threshold limit with the small companies’ threshold, the UK has one of the highest audit exemption limits in Europe. This has been a consistent position of the UK government and it is hard to see Brexit resulting in a lowering of the audit limits.
