Small companies fall out of audit pool

The government has simplified the audit exemption regime for small companies and extended it to most subsidiary companies. The new exemptions have been implemented by the Companies and Limited Liability Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012 and apply to financial years ending on or after 1 October 2012.

For small companies, the changes align the mandatory audit thresholds with small company accounting thresholds. A company will be judged ‘small’ and so exempt from the audit requirement, if two of the following conditions are met:

• turnover not more than £6.5m;