Latest Changes in Audit Regulations and How They Impact Your Business

1. Continuing Professional Development (CPD): Auditors are now required to ensure their compliance with professional bodies’ CPD requirements. This regulation emphasizes ongoing learning and skill development for audit professionals.
2. Eligibility Criteria Adjustments: The new rules clarify that audit-qualified individuals must have control over significant decisions in firms where certain decisions require more than a simple majority. Additionally, audit qualifications of professionals from countries like Australia, New Zealand, and Switzerland will now be recognized in the UK. Firms have until April 2025 to comply with these changes.
3. Audit Threshold Increases: The UK government is raising the company size and audit thresholds under the Companies Act 2006. For accounting periods starting on or after October 1, 2024, the threshold for requiring an audit will increase, easing the audit burden for smaller companies. For example, small company thresholds will rise from an annual turnover of £10.2 million to £15 million, and balance sheet limits from £5.1 million to £7.5 million.

These changes are aimed at reducing the regulatory load for smaller businesses while ensuring robust audit standards for larger entities. It’s important to assess whether your business falls into new audit exemption categories or if adjustments to your governance are needed.

To prepare, consider reviewing your internal audit and financial compliance processes and ensuring staff are meeting new CPD requirements