ICAS raises concerns over recognition of audit's worth

ICAS, the professional body for chartered accountants, has submitted its response to a government consultation on audit exemptions and change of accounting framework.

James Barbour, director of accounting and auditing at ICAS welcomed the proposals contained in the consultation paper but raised concerns that the benefit of audit to the economy is not fully recognised by the government.

“Whilst we are supportive of the proposed measures on this occasion, we would not be supportive of any plans to significantly increase the audit exemption thresholds in the near future, said Barbour.

Barbour said that ICAS had doubts about whether there would be a large take-up of the subsidiary exemption proposals by business.

He also cautioned about reducing audit requirements for unlisted companies.

“The high level of uncertainty [in the current economic climate] means that businesses are wary when dealing with suppliers and customers.

“An audit report can also provide assurance to a lender. Reducing assurance in this way may increase reluctance for lending which is not a desirable outcome in the current market.”