Auditing accounts - whats the law?

[janetsflower]

Is there a law which governs whether or not a limited companys accounts have to be audited annually and if so what is it?

[dzug]

I don't know the full law but the following quote gives some hints as to what it is:

For the year ending (date) the Company was entitled to exemption from audit under Section 249a of the Companies Act 1985 as having a turnover of less than �1 million.

No members have required the company to obtain an audit of the accounts for the year in question in accordance with section 249b(2).

The directors have taken advantage of the Companies Act 1985 in not having these accounts audited under Section 249a(1) (total exemption)

[Miss-taken]

The audit limit is �5.6 million

[janetsflower]

Thanks to you both, looks like my company will be exempt then - sadly my turnover doesn't quite reach �1 million let alone �5.6M!! I can dream though. Thanks again

[Bronson]

Small limited companies do not have to be audited. However, even if not required, it is a good idea to have one since the auditor will report on weaknesses in the accounting system which will help you to prevent fraud and errors.