Audit

An independent examination of the accounts. Most small companies do not need one.

What it means

A statutory audit is an independent examination giving an opinion on whether the accounts give a true and fair view.

Why it matters

Most small companies are exempt, based on turnover, balance sheet total and employee thresholds. Some need one anyway — because they are part of a group, because a funder requires it, or because the articles say so.

What it looks like in practice

Check the current thresholds; they have changed. An audit is a significant cost and a significant time commitment, and voluntary audits are sometimes worth it for credibility with lenders or a buyer.

What to watch out for

Assuming exemption without checking the group position. A small company in a large group can lose the exemption.

Where to get proper advice

Your accountant. This is exactly the kind of question they answer in ten minutes and most owners never ask.