I’m a director of a UK limited company – do we need an audit?
If you are a UK limited liability company with a turnover in excess of £6.5 million or total assets in excess of £3.26 million, you are required by law to conduct an annual audit.
If the company is a member of a group and the group exceeds similar thresholds, it may also be required to have an audit.
I’m a director of a Republic of Ireland limited company – do we need an audit?
Republic of Ireland companies can enjoy an exemption from an annual audit if:
- Its annual turnover is below €7.3 million
- Total assets on its Balance Sheet are below €3.65 million
- The average number of staff in a given year is 50 or less
- The company’s Companies Registration Office (CRO) filing record is fully up to date, and it has filed its last annual return on time
- The company is not:
- a company limited by guarantee
- a holding or subsidiary company
- a bank, insurance, management or investment company.
The company must meet all these conditions, both for the current financial year, and the previous year.
Can we choose to have an audit?
A company which is not required to have an audit may still have an audit through choice. Accounts have more credibility if they have been examined and an audit report produced. For this reason, an audit may be undertaken through choice rather than as a statutory requirement.
Examples of circumstances which result in a voluntary audit for a limited company include:
- Companies where shareholders are not involved in the day to day running of the business (a member or members holding at least 10% of shares can request an audit or 10% of the number of members in a limited by guarantee company);
- Where owners are anticipating a sale, and wish to attain a higher level of assurance for the benefit of the potential buyers;
- Where potential customers or suppliers request audited accounts, perhaps as part of a tender process;
- Where banks/ other financial institutions require an audit as a condition of a loan.
How can we help?
Abac – All Business Advice Centre is registered to carry on audit work in the United Kingdom and the Republic of Ireland by Chartered Accountants Ireland and we provide a full audit and accountancy services to companies in either country.
If you need advice or would like to discuss how we might assist you, please contact us.