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What is an audit and why have one?

Mandatory for some and optional for others, an audit provides a robust review of your accounts to ensure that the business is running smoothly.

Key changes to company size thresholds

From 6 April 2025 the new company size thresholds will increase and impact the type of financial statements a company prepares and whether it requires a statutory audit. The thresholds for turnover, gross assets, and employee numbers are all set to rise, meaning many small companies will no longer be required to undergo mandatory audits. Specifically, the new thresholds are as follows:

Micro entities: Turnover from £632,000 to £1 million; Gross assets from £316,000 to £500,000; Employee numbers remain at 10.
Small companies: Turnover from £10.2 million to £15 million; Gross assets from £5.1 million to £7.5 million; Employee numbers remain at 50.
Medium-sized companies: Turnover from £25 million to £54 million; Gross assets from £18 million to £27 million; Employee numbers remain at 250, with a consultation planned to potentially increase this to 5001.

In addition to the changes to company size thresholds, further changes include removing several outdated or overlapping requirements related to the directors’ report and the directors’ remuneration report. As these changes are implemented, it is important for businesses to stay informed and consult with their advisors to make decisions that align with their long-term objectives.

If you need expert advice on how these changes will impact your business, we combine great expertise, a pragmatic and commercial approach as well as a deep understanding of your business, to provide a first-class audit service which is tailored to your business and your needs. We offer Accountants Complication reports, Limited Assurance review and Agreed upon procedures.

Why have an audit?

Having independent and unbiased confirmation of the businesses financial position and processes are useful for a variety of reasons:

An audit adds to the reliability and credibility to the published financial statements. This may be particularly useful to potential purchasers if the business owner(s) are planning to sell the business in the next few years.

Undertaking an audit will enable your advisors to measure and offer advice on the businesses Key Performance Indicators which will have real benefit to the running, and profitability, of the business going forward.

An audit will provide the stakeholders not directly involved in the day-to-day accounting function of the business the peace of mind that the numbers are accurate and processes and procedures are in place to minimise the potential for inaccurate accounting and in the worst case scenario, fraud.

Meet some of the Audit & Assurance Team