Requirement to have auditors

The basis of the audit requirement is set out in ss
485 and 489 which state that every company shall appoint an auditor if it is
required to produce audited accounts i.e. if it is not dormant and is above a
certain size.

Companies (i.e. ones where no activity has taken
place in the year) do not need an

auditor.
Small companies are not required to prepare audited
accounts and small company exemption is dealt with in the chapter on small
companies. For this purpose a small company is defined as having:
·        
A turnover
less than £5.6m
·        
Net
assets of less than £2.8m
·        
Employing
less than 50 people.
If it fulfills two out of three of those criteria
it does not have to have a statutory audit. It can still have an audit but it
would be voluntary.

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