Assurance and the auditor Flashcards
1
Q
Who must have an audit
A
Companies are exempt from audit if they meet any 2 of the following 3 criteria:
Up to 50 employees
Annual sales of maximum £10.2 million
Total assets of maximum £5.1 million
2
Q
Why would a company who is exempt still want to have an audit?
A
Advantages - Credibility of the company, Fraud deterrent , Reliability of financial information, Protects shareholders’ interests/reduces
management bias
Disadvantages - Tick box exercise – no help to management , Costly , Audit reviews historical financial information – not good for future decision making for banks, investors etc.
