Approximately 32,000 small-to-medium sized enterprises (SMEs) may not need an independent
audit in the future, according to the latest pledge from the Business Secretary
Vince Cable.
The government is currently discussing new proposals in which audits and
accounts filing would not be necessary for smaller businesses. The scheme would also include parent-owned subsidiaries companies that would no longer need to be regulated.
The move, which will dramatically cut auditing costs, is set to save the economy as much as £400 million. It would comply with EU rulings and bring the UK more up-to-date with regulatory legislation.
Speaking about the proposals, Cable said: “The(se) changes…mean that small firms will be able to concentrate on growing and taking on more people instead of paperwork”.
There has been some concern from accounting institute
ACCA that classifying auditing as ‘red tape’ would “oversimplify” the issue. However, accounting body
ICAEW have come out as “broadly supportive” of the move.
The current threshold for auditing applies to companies who turnover £6.5 million and above.
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