The Statutory Instrument to amend the Companies Act 1985 paves the way for smaller regulated firms to prepare abbreviated accounts rather than full, audited statutory accounts.
Mortgage Introducer revealed last month that The Association of Independent Financial Advisers (AIFA) was in talks with the FSA with a view to making small intermediary firms exempt from account audits.
Gary Dixon, managing director of specialist compliance support service Compliance.co.uk, said, “Smaller brokers have been at a red-tape disadvantage and subject to additional costs compared to similar-sized, unregulated companies. This levels the playing field.
“It is pleasing to note that the DTI has listened to the concerns and made this concession but I don’t understand why it cannot extend the same exemption to smaller IFAs,” he said.
Dixon warned that those with the exemption should still be careful. “While it is indicated the changes will be implemented on 5 September, until we see the Statutory Instrument it is unclear whether any changes are retrospective and to which particular accounting periods the new regime applies.”
“It is also vital that anyone holding client money is aware that these changes do not remove the need to have an audit report on the client money. The requirement to complete the RMAR is also entirely unaffected by this change,” Dixon added.
London-based sole broker Roy New said: “For sole traders, we don’t have to do these full audits anyway. It’s only limited companies. But anything that helps smaller firms and takes away some of the administrative burden is a good thing.”
