Tackling your SME’s audit obligations

Written by Paul Murphy


May 28, 2024

Small and medium-sized enterprises (SMEs): are you aware of the benefits of an audit? As you gain traction and begin to grow your business, remaining transparent and authentic to stakeholders and customers alike is key. One of the main ways to do this is by undergoing regular audits! 

We want you to enjoy the benefits of your business’ growth and success, which can only be enhanced by the impact of undergoing an audit. Statutory audit requirements may seem like an intricate maze at first, but with our team by your side, you’ll be equipped to continue thriving within your industry. 

At EKWilliams, we understand the difficulties associated with auditing. That’s why we house audit systems tailored to your sector specific needs, allowing us to recommend strategies to enhance and improve your business – allowing you to thrive within your industry! 

But what are the benefits? Stick with us, as we delve into the essential facets of statutory audits for SMEs… 

Why does my SME need an audit? 

A statutory audit constitutes an impartial assessment of a company’s financial records and statements, aiming to offer confidence to stakeholders in the accuracy and reliability of your company’s financial information. While commonly associated with larger corporations, SMEs are equally bound by these obligations – subject to meeting the criteria. It’s worth noting that small companies are not legally required to be audited whereas medium to large are. However, we want to share the benefits that SMEs can reap with regular auditing. 

At EKWilliams, we emphasise the importance of statutory audits for SMEs due to several reasons. Firstly, there are obligations in many jurisdictions that mandate SMEs to conduct annual statutory audits if they meet certain criteria. These audits ensure compliance with regulatory requirements and help avoid legal penalties.  

Additionally, audits play a crucial role in bolstering stakeholder confidence. Whether it’s investors, creditors, or potential collaborators, these audits instil trust by providing assurance about the financial health and integrity of the SME. Audited financial statements can also streamline tax compliance for SMEs, preventing potential tax-related complications and ensuring smooth tax filing processes.  

Lastly, access to financing is often contingent upon audited financial statements, as many financial institutions require them as a prerequisite for extending loans and credit facilities. In summary, statutory audits serve as a vital tool for SMEs, addressing legal obligations, fostering stakeholder confidence, facilitating tax compliance, and enhancing access to financing opportunities. 

Criteria for Statutory Audits

Although the exact parameters for statutory audits in SMEs may vary, the common criteria includes:  

  • Revenue: SMEs surpassing a certain revenue threshold typically need a statutory audit.  
  • Total Assets: The value of a company’s assets might trigger the obligation for an audit in certain cases. 
  • Workforce size: The number of employees can also influence audit requirements.

For more information surrounding criteria for audits and whether you may qualify for an exemption, please click here. More importantly, there are plans to increase audit thresholds for small companies. These are set to be introduced in October 2024 with consultations currently ongoing.  

 Our role in SME Statutory Audits  

 With a stellar track record for carrying out efficient audits of SMEs, we offer a range of pivotal services:  

Tailored Audit Planning 

We craft bespoke audit plans tailored to the needs and risks of each SME, ensuring a comprehensive and cost-effective approach. 

Risk Evaluation  

Our experts conduct meticulous assessments of the financial risks confronting SMEs, devising strategies to mitigate them effectively.  

Regulatory Compliance 

We remain ahead of evolving regulations, ensuring SMEs remain compliant with all statutory audit requisites.  

Strategic Insights 

Beyond mere compliance, our team assess and explore your business to provide strategic ways to enhance and improve performance.  

 For SMEs, statutory audits serve as an opportunity to showcase financial integrity and earn the trust of stakeholders. At EKWilliams, we use our expertise to help you meet statutory audit requirements with confidence. Proactive engagement with professionals like us is imperative to ensure your compliance, foster growth, and secure your financial future. While you are not legally obliged as a small company to be audited, we highly recommend considering an audit for all the benefits we have mentioned.  

 If you would like to enquire about our services or need support with your business, please contact our Audit and Accounts manager, Paul Murphy, at [email protected]