Part 16Audit

Chapter 1Requirement for audited accounts

Exemption from audit: small companies

477Small companies: conditions for exemption from audit

(1)

A company that meets the following conditions in respect of a financial year is exempt from the requirements of this Act relating to the audit of accounts for that year.

(2)

The conditions are—

(a)

that the company qualifies as a small company in relation to that year,

(b)

that its turnover in that year is F1not more than £6.5 million, and

(c)

that its balance sheet total for that year is F2not more than £3.26 million.

(3)

For a period which is a company's financial year but not in fact a year the maximum figure for turnover shall be proportionately adjusted.

(4)

For the purposes of this section—

(a)

whether a company qualifies as a small company shall be determined in accordance with section 382(1) to (6), and

(b)

“balance sheet total” has the same meaning as in that section.

(5)

This section has effect subject to—

  • section 475(2) and (3) (requirements as to statements to be contained in balance sheet),

  • section 476 (right of members to require audit),

  • section 478 (companies excluded from small companies exemption), and

  • section 479 (availability of small companies exemption in case of group company).