It has been recently announced that small companies as defined in the Companies Act will be exempt from audit for accounting period ending after 1 October 2012. The exemption thresholds will now be quite high but as HMRC are stepping up their investigation activity, will exemption increase the risk of a HMRC enquiry?
It is not within the scope of an audit to examine every the document, nevertheless HMRC derive some comfort over the accuracy of the accounts knowing that an independent review is being conducted under rigorous audit standards. Auditors sign off to an opinion that adequate records are kept and that proper systems are in place to enable the accounts show a true and fair view.
At Tuchbands, most audit clients have expressed a desire to retain the statutory audit partly for the above reason.