All companies incorporated under the Companies Act must be audited unless they fulfil two or more of the following criteria for exemption:
Where a company is part of a group, the above thresholds apply to the aggregate of the group’s turnover, assets and employees.
Limited companies meeting the exemption criteria may still choose to have an audit in order to provide assurance to shareholders and other interested stakeholders.
In certain circumstances 10% or more of the shareholders in any company exempt from audit may require the company to have an audit.
In addition, the Companies Act 2006 requires certain companies to have an audit even if they would otherwise have qualified for exemption, including: • public limited companies;
(unless qualifying for an exception);
Members of groups that contain any of these types of company will also require an audit.
A company is required to prepare accounts for the shareholders showing a “true and fair view” and complying with all necessary regulations even if they do not require an audit.