The government has confirmed that the audit threshold will be increased from £5.6m turnover and £2.8m assets to £10.2m turnover and £5.1m in assets from the 2018 financial year.

The threshold change will be introduced via a Statutory Instrument before the end of 2017. This will follow the affirmative procedure.

The move should reduce costs for the smaller, growing societies as it will reduce its compliance costs although there were concerns that raising the audit threshold would reduce the level of oversight over these bodies.

Some respondents to the consultation were concerned about the ‘lack of oversight this may bring, saying that these types of organisations are of the very type that need the guidance, discipline and control that a full audit brings about’ and ‘the impact on the quality of financial reporting’.

Despite the reduction in the threshold, some societies may still have to conduct an audit due to their member voting system.

The instrument and new thresholds are expected to come into force from 6 April 2018.

There will be no changes to the thresholds for charitable societies which going forward will have much lower audit thresholds as the requirement for a full audit will remain at turnover in excess of £250,000 and total assets in excess of £2.8m. In the consultation response the government stated: ‘While the thresholds for charitable societies are not different to those for other charities, their level of regulatory oversight is also lower.’

For example community benefit societies that are charities are currently exempt from registration with the Charity Commission. The government added that changing the audit threshold for this discrete part of the sector was outside the scope of the consultation.

Increasing audit thresholds for co-operatives and community benefit societies: response to the consultation, issued by the Treasury, 1 December 2017.