However, while many accountants sought a substantial exemption - perhaps covering companies with annual sales of up to pounds 1m or pounds 2m - the proposals are much more limited. The only companies freed of the burden are those which have a turnover below the VAT threshold (the Chancellor plans to raise this to pounds 37,600), and which satisfy other requirements - for example, a balance sheet total under pounds 100,000 and unanimous shareholder support for abandoning the audit.
Two alternatives have been put forward for discussion - Option A, which offers 'maximum deregulatory benefit' by doing away with the audit requirement altogether; and Option B, which replaces the audit with a compilation report stating that the accounts have been properly set out.
Neil Hamilton, corporate affairs minister, said he would decide on which route to take in the light of comments received by the closing date, 30 June. But although he has pledged to act swiftly, a change in the law is still likely to be some way off.
In the meantime, legislation has freed some of the country's smallest companies from the requirement to file full accounts - and financial managers and directors of small or medium- sized companies may not yet be aware of the changes.
Ray Mayes, author of the latest edition of Preparing Company Accounts, from Accountancy Books, said: 'It may be that many smaller companies are reducing unnecessarily complicated accounts - or providing gratuitous (and perhaps commercially sensitive) information. In the smaller company, the owner may be spending too much time on the accounts instead of concentrating on running a business.'
The book explains how new rules apply and looks at implementation of the Accounting Standards Board's FRS3.
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