Financial reporting: the government consults on audit exemptions (including exemptions for subsidiary companies) and change of accounting framework

In October this year, the Department for Business Innovation and Skills (‘BIS’) launched a consultation on audit exemptions and change of accounting framework. BIS proposes, among other things, that a subsidiary company that is not quoted and is outside the banking or finance sector should be exempt from mandatory audit subject to certain conditions, including the requirement that its parent company guarantees the subsidiary’s debt. The consultation also seeks comments on the proposal that would allow companies that prepare individual accounts under IFRS to change their accounting framework to UK GAAP.  

Comments are requested by 29 December 2011. BIS proposes that any changes to the audit and accounting regime would apply for accounting years ending on or after 1 October 2012.  

BIS: Consultation on audit exemptions and change of accounting framework available at: http://www.bis.gov.uk/assets/biscore/business-law/docs/c/11-1193-consultation-audit-exemptionsand-accounting-framework.pdf