Is an audit right for your business?

In an ever-evolving business landscape, the importance of financial transparency and accountability cannot be overstated. With the audit thresholds rising significantly from April 2025, the vast majority of small businesses, particularly in the SME-dominated South West, will find themselves exempt from audit requirements. But for some businesses, there can still be good reasons to choose to be audited.

So how do you know if it’s the right decision for your business? Peter Lomax, Partner and Head of Audit at Westcotts Accountants, explores some of the positions a business may find itself in where an audit can offer tangible value and strategic benefits – even when it’s not a legal obligation.

Changes to audit thresholds

For companies whose financial years began after 6 April 2025, the bar has been raised significantly before a statutory audit is required. In short, your company will generally qualify for an exemption if at least two of the following conditions apply:

• Annual turnover less than £15 million
• Assets under £7.5 million
• 50 or fewer employees on average

For many small businesses, this will be welcome news. Statutory audits can feel time-consuming or burdensome, especially when internal resources are stretched. But it’s also important not to overlook the value an audit can deliver in supporting your day-to-day management, strategic thinking and growth plans – particularly in certain business contexts.

When is a voluntary audit worth considering?

An audit isn’t necessary for every business. But there are a variety of not-uncommon scenarios which might make it worth looking again at the value it can bring. Here are my top five:

1. You have external shareholders or investors.
   Shareholders want confidence in the numbers they’re being shown. A voluntary audit provides independent scrutiny and assurance that the financial statements reflect a true and fair view – helping to build trust, transparency and stability in investor relationships.
2. You’re looking to borrow or access new finance.
   Likewise, potential lenders are always interested in working with independently verified figures. It is also the case that many financial institutions view audited businesses as lower risk, which can lead to better lending terms or more competitive rates. As a result, where financing is central to your growth strategy, the return on an audit could outweigh its cost.
3. You’re preparing for growth, investment or acquisition.
   Voluntarily undergoing an audit can be a clear signal of ambition and professionalism. It tells the market – including potential investors, partners or even buyers – that you’re well-run, transparent and ready to scale-up. In competitive sectors, that credibility can put you at an advantage.
4. You want to strengthen internal controls and planning.
   The audit process can help highlight gaps in internal systems, reporting accuracy or governance.

That scrutiny often prompts the development of more robust internal processes, greater operational discipline, risk management and forward planning.

5. You’re seeking better business insight.
   A well-executed audit forces business owners, leadership teams and their advisors to take a detailed look at the business’s operations. This often brings to light areas for improvement and encourages tough questions to be asked about performance, sustainability and long-term direction. Business owners regularly tell us they leave the audit process with a fresh perspective, clearer strategic priorities and greater confidence in their decisions.

So is it right for you?

The rising threshold means statutory audits will now apply to fewer businesses than before. But for many, a voluntary audit is not just about compliance; it’s about clarity, credibility and readiness for what comes next.

At Westcotts, we support businesses across the South West through their decision-making, preparation and of course through the audit process itself.

If you’d like to explore whether an audit could help your business move forward, contact Peter Lomax (Peter.Lomax@westcotts.uk) or call 01752 666601.