§ Mr. John Marshall
To ask the Chancellor of the Duchy of Lancaster if he is yet in a position to announce the outcome of the Government's review of audit requirements for small companies.
§ Mr. Maude
On 22 May 1986, my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) announced that the Government had decided to retain the statutory requirement for small companies to have their accounts audited. Since that announcement, the Government have considered again the arguments for and against the compulsory audit of small companies. We still believe that the involvement of an independent professional accountant such as the audit requirement entails is likely to improve the reliability of accounts and provide a continuing protection against fraud. We have looked at possible alternative ways of achieving these objectives without requiring a full-scale audit, but have concluded that none of the alternatives offers sufficient advantages over the audit. We do not, therefore, propose to remove the statutory requirement.