The Companies Act 2008 was revised removing the requirement for certain companies to be audited. The Act has become more flexible and more understanding to start-ups and small to medium sized businesses who may find an annual audit a financial burden during their early years. The Act now provides for two types of financial reviews, an independent financial review and an audit. Choosing one or the other depends entirely on whether they fall above or below a particular threshold.
Points are given to a business according to their annual turnover and this threshold is known as the Public Interest Score (PIS). Points are awarded by the amount of money owed to third parties, number of employees and number of shareholders. Businesses that score below 350 may opt for an independent review whereas a PIS score of 350 or more must undertake an audit.
Many business owners opt for an audit without knowing that the choice of an independent review is available, so breaking down the difference between an independent review and an audit is important. The Accounting Team will review your financials and find your Public Interest Score, providing insights and advice on which option to take.
The Accounting Team also provides reviews of a business’s financial statements to simply determining that no financial errors or miscalculations have occurred. This type of independent financial review requires less rigorous investigation, and the costs inevitably are less than expected for an audit.