Should you have an Audit?

David WilcePosted 26 November 2018 By David Wilce, Senior Manager – Business Services In Business Business Improvement Charity Construction Contractors Leisure and Tourism Manufacturing Professional Practices Rural and Landed Estates Specialist Medical Accountants

With certain exceptions, companies which are “small” as defined in the Companies Act, do not need to have their annual financial statements audited.

The criteria for “small company” are any two of the following:-

  • Turnover < £10.2m
  • Gross assets (ie fixed + current assets) < £5.1m
  • No. of employees < 50

The above notwithstanding, a significant number of companies which qualify as small choose to have their financial statements audited, and this article sets out below some of the reasons why an audit might be appropriate for your business:

  • The audit process provides additional comfort on the accuracy and reliability of the company’s record-keeping, particularly if senior management and/or shareholders are remote from the day to day operations;
  • Audited financial statements may be required to satisfy prospective lenders or to comply with lending covenants;
  • Companies providing services to the public sector are often required to provide audited financial statements when tendering for contracts;
  • Being able to provide audited financial statements may be beneficial if the business is likely to be sold at some stage in the future – prospective purchasers are likely to place greater reliance on audited financial statements when carrying out their due diligence.

We work with you during the audit process to help you understand any issues or business risks which may arise. We can also provide support and advice on possible options which could help you to mitigate those issues or risks.

 

To discuss this or anything else, please contact David Wilce on 01225 785520 or send him an email


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Client testimonial

We were keen to secure the support of advisers we knew and trusted, understood owner managed businesses, and critically who knew the Agency when launching into the transaction process. MHA Monahans has been Design Bridge’s auditor for many years and combined forces seamlessly with MHA MacIntyre Hudson’s transactions team. Together they really grasped the detail of the transaction and provided invaluable support and advice to assist the shareholders to maximise deal value, along side our legal team at Humphries Kirk and our lead advisory team at Lazard & Co.

Mike Hawkins, Group FD, Design Bridge Ltd