What is an exception to the audit?

The exception to the audit is a contribution in the UK and other European Union countries for small and medium -sized income companies, as well as partnership with limited responsibility (LLP). It allows them to require an exception to the statutory requirements of the annual accounting audit of the government. In the United States, only publicly traded companies as well as the plans of private companies must be audited annually. All publicly traded companies in the UK, as in the US, must not demand an exception to the audit.

Although the reasons for audit are healthy, small companies have a good argument to organize the liberation of audit. Costs for small companies can often be unbearable, although fees for audit for small and medium -sized companies (SMEs) are often 0.5% or fewer profits of the company. Small companies can also claim that they are legally required to keep book accounts with detailed daily records, even if they are eligible for liberation from Audit Anyway.

qualification for liberatedThe audit in the UK requires the company to meet all three requirements. Must meet the legal definition for a small society. The company must also have a financial turnover of a maximum of £ 6.5 million. In addition, the company must also have a maximum of £ 3.26 million.

Confusion sets the contribution to the exception of the audit to define what a small company is. In the UK, a private company must meet two of the three established conditions to qualify as a small one. They include the number of employees of 50 or less, as well as two previous balance sheet conditions of a total of £ 3.26 million or less and an annual turnover of £ 6.5 million or less. The annual turnover is defined as net volume or sales profit after all discounts and taxes have been deducted.

External business audits of privately held companies are considered to be public benefit for several reasons. They contributeEffective management of companies by increasing the reliability of internal financial processes. Because the audit is an increased level of public transparency in terms of the behavior of private enterprises, they discourage fraud and money laundering. The audits also encourage the main parties to control the company in the most effective way.

Despite these benefits, from the estimated 4,500,000 companies in the UK since 2006, 97% of the company with 0 to 49 employees who were eligible to demand exemption from the audit. Another 2% were medium -sized companies, with 50 to 249 employees, and although some qualified for the liberation from the audit, the 2006 survey indicated that 73% were for voluntary audit, even though they were exempted.

The

series of round table meetings at the end of 2010 and early 2011 carried out the Association of Chartered Accountants (ACCA) in Europe and involve other countries that give an exception to audit to small businesses such as Australia and New Zealand. MeetingALA European Commission and experts in the financial service industry in order to understand the consequences that may occur if the limit for liberation is increased in the European Union. The meeting revealed that at present about 98.7% of all European companies are granted liberation from the audit. Some countries also have a high threshold or limit point that is no longer allowed, while Germany and Belgium set the limit of EUR 8.8 million in annual turnover and nations such as Greece, Poland and Spain, which is significantly lower.