Recent changes to mandatory audit thresholds may have come as a welcome relief. Where companies once required an audit if they had a turnover of £10.2 million and/or assets exceeding £5.1 million, the bar has now been raised.
Businesses only need an audit if they have a turnover above £15 million and/or assets worth more than £7.5 million.
If your company now falls below these limits, you may be tempted to shelve the idea of an audit entirely and focus on running your business without disruption.
However, before you set audits aside for good, it is worth considering the wider value an audit can bring.
The case for auditing
Although audits are often seen as time-consuming or complex, the benefits go far beyond compliance. Research shows that businesses opting for voluntary audits may be missing out on measurable financial and reputational gains.
A global study by academics Ann Vanstraelen and Caren Schelleman, which examined businesses in the UK, USA, and South Korea, found consistent advantages across all markets.
Audited companies benefited from lower interest rates on debt, better credit ratings, and improved access to finance.
The credibility provided by audited accounts gave lenders and investors greater confidence, leading to better deals and broader funding opportunities.
Audits can also act as a safeguard against fraud and error. A structured audit process provides an independent review of your financial records, reducing the risk of both deliberate misconduct and accidental misreporting.
What does this mean for your business?
Ultimately, audits are one of the most reliable ways to ensure your financial records are accurate, consistent, and credible. While they do require time and attention, the benefits often outweigh the effort – saving time in negotiations, improving financial terms, and reducing risk.
More importantly, an audit can bring peace of mind. You will know that your accounts have been independently verified and that there are no hidden surprises around the corner, whether in the form of inflated interest costs or unexplained transactions.
Interested in how a voluntary audit could support your business? Contact our team today for tailored advice and practical guidance.