Voluntary audits improve decisions and confidence

New regulations increasing the financial  thresholds that determine whether a company requires a statutory audit will come into effect from 6 April 2025, writes Catherine Cole, associate director at Pierce.

A company may be exempt from a statutory audit if it meets two out of these three criteria:

• Turnover of not more than £15m – previously £10.2m
• Total assets of not more than
£7.5m – previously £5.1m
• 50 or fewer employees – no change

However, opting for a voluntary audit can offer significant benefits as it provides useful insights and ensures that the financial records on which decisions are based are accurate and robust, meaning leaders can make more informed decisions.

Audits can highlight weaknesses in internal controls that could expose the company to financial risk and provide guidance on how to mitigate those risks.

Moreover, an audit provides an independent review of financial statements, fostering trust with investors, creditors and customers and is particularly valuable when seeking finance or planning to expand.

Audits also help ensure compliance and identify opportunities for improvement in areas such as tax planning, financial reporting or industry regulations.

For rapidly growing businesses that are initially exempt from audit requirements but may soon surpass the new thresholds, it will be particularly important to plan ahead and evaluate future needs.

While the increased audit thresholds may reduce short term costs, an audit remains a powerful tool to improve financial records, strengthen internal systems and boost stakeholder confidence, providing vital stability in a changing economic and regulatory landscape.

At Pierce, our dedicated audit team is here to provide expert advice and support on how these changes may affect your business. Get in touch with us today.