Letter: External audits enhance company reputations

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The Independent Online
Sir: Michael Power's article (21 April) notes the proliferation of audit in fields such as education and the environment, and the belief of politicians that external policing is a useful management tool. At the same time, however, the Government has decided to reduce the application of audit techniques in the sector in which they originated and were designed for - the commercial sector - with the abolition of the statutory audit for certain companies with a turnover of less than pounds 350,000.

An individual shareholder or group of shareholders will need to hold 10 per cent or more of the issued share capital in order to force these small companies to have a statutory audit. While taxpayers and council taxpayers will know that those who spend their money have been subject to strict audit and value-for-money studies, minority shareholders in these smaller business entities will have no such

assurance.

Although, in the case of audit, the Government once again believes that here is something the public sector can learn from the private sector, at the same time it has also decided that here is something the small end of the private sector can do without.

Yours faithfully,

CLAIRE MELVIN

Editor

Audit Briefing

Croydon,

Surrey

21 April

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