UK Reduces Business Reporting Requirements

Recently the UK government has announced the new reduced auditing and reporting rules that could save millions of pounds in businesses’ administration costs.

According to the current rules, small companies must prepare balance sheet and turnover thresholds to qualify for audit exemption in the UK. New regulations will provide that small- and medium-sized companies are enabled to obtain an exemption if they meet two of three criteria regarding the balance sheet total, turnover and number of employees.

Most subsidiary companies will be exempted from mandatory audit if their parent companies guarantee their liabilities. The companies preparing their accounts in accordance with International Financial Reporting Standards (IFRS) will be allowed to move to UK Generally Accepted Accounting Principles (UK GAAP) and take advantage of reduced disclosure rules.

The new auditing and reporting regulations are expected to apply to the accounting years ending on or after October 01, 2012.