Recent proposals by Vince Cable’s Department of Business Innovation and Skills in conjunction with the Office of Fair Trading with regards to the eventual easing of current legislation requiring SME businesses to fulfil financial auditing have sparked many questions and uneasiness across HR payroll offices.
In a report to the Economic Affairs Committee of the House of Lords, it has been clarified that transparent business figures are essential for companies seeking investment. However, there is a question mark over whether or not SME businesses should be required to comply statutorily with the same accounting modus operandi as large listed companies who have a diverse range of investors and shareholders. Further suggestion has been added that the burden to SME companies could be reduced by allowing them to undertake voluntary audits as best befit their business circumstances and plans.
Whilst these proposals may alleviate swathes of responsibility from the shoulders of SME HR payroll representatives, many are well aware of the cons that could accompany the pros should these plans come to fruition over the course of time. These reservations are highlighted by, Stephen Alambritis of the Federation of Small Businesses, who forewarns, “Any decision to remove mandatory auditing for small and medium sized firms could provide a double edged sword to say the least. Potentially it could lead to a drying up of overseas investment and business with British firms, as it will make it harder to assess the strength of a company. For some firms it could also make it harder for them to access bank finance as banks tend to want as much information as possible, of which audited accounts are a key part”.
We, at Moorepay, one of the UK’s leading HR payroll services, are at hand to continue to guide our clients of all sizes through both current auditing legislation and remain at the cutting edge of future evolutions and amendments.