A company is required to have an annual audit, unless an exemption applies (CA2006 s475-484). Small companies (including micro-entities) may be exempt from audit requirements (with some exceptions, eg, public companies and banking or insurance companies).
The auditor’s objectives include obtaining reasonable assurance about whether the annual accounts as a whole give a true and fair view and are therefore free from material misstatement. The auditor must issue an auditor’s report to that effect, and also including an auditor’s statement on directors’ report (and strategic report, if produced) (CA2006 s495-497A).
Auditors have a statutory right of access, at all times, to a company’s books, accounts and vouchers. They can also require officers and employees of the company to provide such information as the auditors think necessary for the performance of their duties (with an exception for information subject to lawyers’ privilege) (CA2006 s499).
The directors are also required to include statements in their directors’ report regarding the completeness of information provided to the company’s auditors. Breach of relevant requirements may be a criminal offence by the directors.