In July the Department of Trade and Industry (DTI) announced new proposals to raise medium-sized company thresholds to the EU maximum. (See factorscan, UK in Depth, DTI to raise company thresholds, will cut red tape for thousands of firms and give tax incentives to more companies.
The DTI proposed that the threshold below which an audit is not required will be raised from Ј1m turnover to the new small-company threshold of Ј5.6m.
The current audit exemption threshold was raised from Ј350,000 in July 2000. At the time members of the Institute of Credit Management (ICM) commented: "Companies had their ratings changed and additional security was required, credit limits were reduced, became more expensive and more effort went into assessing the creditworthiness of companies."
By increasing the threshold to Ј5.6m these issues may be compounded.
