Which is NOT a criterion for audit exemption?

Which is NOT a criterion for audit exemption?

• A. Annual turnover no more than £10.2 million
• B. Assets worth no more than £5.1 million
• C. 50 or fewer employees on average
• D. Being a subsidiary of a larger group

Answer: (D)

Audit exemption for small companies is based on meeting two of three size thresholds: turnover not more than £10.2 million, assets (balance sheet total) not more than £5.1 million, and an average of no more than 50 employees. Being a subsidiary of a larger group is not one of these size criteria, so it isn’t a basis for exemption by itself. The group context can affect whether consolidated accounts are required, but the exemption itself hinges on those size limits. That’s why being a subsidiary is not a criterion for audit exemption.

Audit exemption for small companies is based on meeting two of three size thresholds: turnover not more than £10.2 million, assets (balance sheet total) not more than £5.1 million, and an average of no more than 50 employees. Being a subsidiary of a larger group is not one of these size criteria, so it isn’t a basis for exemption by itself. The group context can affect whether consolidated accounts are required, but the exemption itself hinges on those size limits. That’s why being a subsidiary is not a criterion for audit exemption.