Whether or not a UK company requires an audit depends on a number of factors, including its size, type, and whether or not it is listed on a public stock exchange.
Companies that are required to have an audit:
- All public companies listed on a stock exchange
- Large private companies that meet two of the following three criteria: (Thresholds are subject to change. Please check here for the current thresholds).
- Annual turnover of more than £10.2 million
- Balance sheet total of more than £5.1 million
- Average number of employees of more than 50
- Companies that have foreign subsidiaries
- Companies that are subject to specific regulatory requirements, such as banks and financial institutions
Companies that may be exempt from an audit:
- Small private companies that meet two of the following three criteria:
- Annual turnover of less than £10.2 million
- Balance sheet total of less than £5.1 million
- Average number of employees of less than 50
- Micro-entities, which are companies that meet two of the following three criteria:
- Annual turnover of less than £650,000
- Balance sheet total of less than £350,000
- Average number of employees of less than 10
Even if a company is exempt from an audit, its shareholders may still require one to be carried out.
How to find out if your company needs an audit:
If you are unsure whether or not your company needs an audit, you should consult with an accountant or auditor. They can help you to assess your company’s individual circumstances and determine whether or not you are required to have an audit.