The UK's Department of Trade and Industry announced today that it is inviting comments on the impact of the increase to £1 million in the threshold below which small companies are exempt from the requirements of an independent financial audit.

The audit threshold level was increased in the UK from £350,000 to £1 million and applied to financial periods ending on or after 28th July 2000. It is noted that the EU maximum to which the audit threshold level could be increased is currently £4.8 million.

The DTI's intention to assess the impact of the last increase and to consult before making a final decision on further increases in the audit threshold level was outlined in The Modernising Company Law White Paper, published in July 2002. The paper also proposes certain other changes to UK's company law.

The DTI said it is particularly seeking evidence, such as statistical information on the costs and benefits of the last increase, from all interested parties. The information submitted will be used in a further consultation on the issue, proposed for summer 2003.

The Modernising Company Law White Paper can be found at:
www.dti.gov.uk/companiesbill

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