Does my business / charity need an audit?

Several factors will determine whether a business or charity is legally required to undergo an audit and, in some instances, an organisation may choose to have their company audited in order to increase their credibility and add value.

Most limited companies will need to carry out an external audit if they meet any of the two criteria below:

– turnover of more than £10.2 million per annum

– collective assets over £5.1 million

– More than 50 employees

However, small organisations are not always exempt from audits, for example, if shareholders who own more than 10% of your business request an audit, you will be legally required to do so, no matter on size. Additional factors such as changes in ownership, being part of a group, seeking investments, grant or funding requirements and industry regulations may also prompt a business owner to undergo an audit.

For charities, many require regular audits regardless of size by the request of donors or trustees. It is a legal requirement when the charity meets either of the thresholds below:

– Gross annual income more than £1 million

– Gross assets of above £3.26m and a gross annual income above £250,000

Note that when a charity’s income falls between £25,000 and £1m, an independent examination is still required by the Charities Commission.

There are many other factors and reasons that an audit may be necessary, and our audit team are experienced in being able to advise you according to your individual circumstances. Get in touch today if you need to discuss things further.