Simplification of Audit Requirements
The Department for Business, Innovation and Skills has recently published the Companies and Limited Liability Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012. These Regulations are set to come into force on 1st October 2012 and establish new exemptions to the requirement to undertake an audit, as well as widening the current exemptions.
The aims of the Regulations are to reduce the number of companies required to undertake an audit and reduce the burden of financial accounting for UK companies. As part of this, the existing exemption for small companies will be simplified, and many subsidiary companies may also find they are exempt from the requirement to undertake an audit, provided certain criteria are met. The rules in relation to transferring from preparing IAS (International Accounting Standards) accounts to preparing Companies Act accounts are also set to be relaxed, thereby allowing companies more flexibility in the type of accounts that are prepared.