For audit exemption a company must qualify as small, or have qualified as small in the previous year & therefore be in a year’s grace.
The financial criteria for assessing if a company is small are that two of the following conditions must be met:
• Turnover of the company must be less than £10.2million;
• Gross assets of the company must be less than £5.1 million;
• Employees of the company must be less than 50.
• If the company is part of a group then the group as a whole must meet the above criteria.
Additionally, the company must not be ineligible for any part of the year (PLCs, banking and insurance companies, etc., listed under CA 2006 s384). The company must not be part of a group that does not qualify as it includes ineligible companies.
Even if a company is exempt due to the above an audit may be required if members with 10% of a class of shares request an audit.