New Audit Exemption for Co-ops and Mutuals
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The Friendly and Industrial and Provident Societies Act 1968 (Audit Exemption) (Amendment) Order 2006 was made on 7th February and came into force on 6th April 2006 for years of account ending two months or more after that date.
It means that non-charitable industrial and provident societies need not appoint an auditor and have their accounts audited if their assets do not exceed £2,800,000 and its turnover does not exceed £5,600,000. This does not apply to credit unions, registered social landlords, insurance societies or societies holding deposits other than withdrawable share capital. Where this applies and the society's turnover is more than £90,000 per annum they will have to have an accountant's report (cheaper than a full audit) prepared on their revenue accounts and balance sheet.
For charitable societies, the figures for not needing a full audit are £2,800,000 in assets and £250,000 turnover under this change but will rise when the Charities Bill is passed to £500,000 turnover.
This is the first use of the Industrrial and Provident Societies Act 2002 (the "Thomas" Act) to bring industrial and provident society law into line with Company Law after Company law has changed.
With the Company Law Reform Bill before Parliament, it may not be the last!
For details see:
SI 2006/265 - Web version (HTML)
SI 2006/265 - Print version (PDF - 42 KB)
SI 2006/265 - Explanatory Memorandum (PDF - 105 KB)