Audit
Charities and companies have different levels in choosing whether they can opt out of a full audit.
The level for any charity is below a gross income of £1,000,000 or less for accounting periods ending on or after 31 March 2015. For full guidance see the ICAS website.
A UK company which is not a charity may qualify for an audit exemption if it has at least two of the following:
- An annual turnover of no more than £6.5 million.
- Assets worth no more than £3.26 million.
- 50 or fewer employees on average.
An organisation which is not required by law to have an audit may choose to do so if the financial governance benefits are deemed to be proportionate to the cost. Some funders require the organisations they fund to have audits.
The government agreed thresholds should be reviewed at least every ten years and that, subject to resources, it would aim to undertake a review in 2022. As this has not yet happened, a review of the financial thresholds may be on the cards for 2025.
An internal audit is a service that is contracted at a board’s discretion to review internal controls, financial procedures and operational processes; identifying improvements in risk mitigation and ensuring value for money. An internal audit may also be called upon to undertake fraud and corruption investigations. It is invariably the preserve of the largest arts institutions and is very rarely found in small and medium-sized organisations.
