In accordance with current regulations, a registered society must, unless it is a small society, appoint one or more qualified auditors to audit its accounts and balance sheet in each financial year. The members of most registered societies (since exceptions to the exception apply!) may dis-apply the requirement for an audit by resolution if the total value of the society’s assets at the end of the preceding year of account did not exceed £2.8 million and its turnover for that preceding year did not exceed £5.6 million.
This means that registered societies are subject to mandatory audit that are different to the audit thresholds of similar organisations that have a company structure.
Under the proposed new regulations, registered society audit thresholds would increase to £5.1 million (assets) and £10.2 million (turnover) respectively. These would match the balance sheet total and turnover thresholds for a company to qualify as a small company under section 382 of the Companies Act 2006. The current audit requirements for credit unions will remain. The consultation closes on 22 September 2017. The government would then plan to lay regulations in autumn of this year and for them to take effect on 1 April 2018.