The short answer: start with three separate requirements: the UK company’s statutory accounts, whether those accounts need an audit, and what the overseas group needs for its own reporting. One engagement does not automatically cover all three.
This guide is for overseas CFOs, group controllers and UK finance directors appointing a UK adviser. A small UK revenue figure can sit alongside substantial group reporting responsibilities. The useful question is what the UK entity and the parent each need delivered, by whom and by when.
Does a small UK subsidiary still need an audit?
Possibly. The UK company’s turnover alone does not settle audit exemption. Group size, eligibility, the relevant financial year and other conditions matter. A parent’s overseas audit does not automatically replace an audit of the UK company’s own accounts.
The parent-guarantee exemption under section 479A has specific conditions, including a parent undertaking established under UK law. A guarantee from an overseas parent alone does not meet that condition. Other exemptions may be available, so establish the group structure before assuming either that an audit is compulsory or that it can be avoided.
Ask for the exemption assessment to identify the relevant entities, accounting period and basis for the conclusion. If the group auditor requests work even where the UK company is audit-exempt, that is a separate scope to agree.
What should the UK engagement include?
| Requirement | What to agree | Common misunderstanding |
|---|---|---|
| UK statutory accounts | The accounting framework, who prepares the accounts, who approves them and who files them. | A group reporting spreadsheet is assumed to be a complete set of UK statutory accounts. |
| UK statutory audit | The entity, reporting period, audit timetable and information the finance team must provide. | The parent’s audit is assumed to cover the UK statutory opinion. |
| Group-auditor work | Instructions, materiality, reporting format, required procedures and clearance deadline. | A component reporting package is assumed to be included in the local audit fee. |
| Corporation tax | Who prepares the computation and return, supplies adjustments and monitors deadlines. | Tax work is assumed to be part of accounts preparation or audit. |
Management retains responsibility for the accounts and judgements. Where the audit firm is also asked to prepare accounts or provide other services, it must assess whether that work is permitted under the applicable independence requirements.
Can we use the group’s IFRS numbers for the UK accounts?
They can be a starting point, but the reporting framework must be confirmed. FRS 102, FRS 101 where eligible, and UK-adopted international accounting standards have different requirements. A group ledger or reporting package may need adjustments and additional disclosures for UK statutory accounts.
Agree who will identify those differences and prepare the reconciliation. Bring the group accounting policies and previous UK accounts to the first discussion. If a conversion is needed, have it scoped explicitly instead of leaving it until the audit is nearly complete.
What information should we have ready?
- The UK company name and number, ownership chart and parent jurisdiction.
- Latest UK accounts and a current trial balance or management accounts.
- The financial year end, group clearance date, board approval date and filing deadline.
- Any group-auditor instructions and reporting templates already available.
- A summary of trading, employees, stock, assets and significant changes.
- Details of intercompany funding, balances, guarantees and parent support.
- Who prepares the UK accounts and tax return, and where the finance team and records are based.
You do not need a complete audit file to start a conversation. These items help the adviser identify the work, dependencies and uncertainties behind a proposal.
What affects the fee?
The main drivers are the UK activity, significant balances and judgements, quality of supporting records, number of entities, accounting framework and additional group deliverables. Overseas ownership on its own should not be treated as a substitute for assessing the actual work.
Compare the audit fee separately from accounts preparation, tax, conversion work and group reporting. Ask whether opening-balance work is included in the first year and how recurring fees will be reviewed. A low headline price is difficult to assess if essential deliverables sit outside it.
Accendo’s audit fee estimator provides an indicative range for suitable scopes after the questions and contact details are completed. Group work, unusual frameworks and complex requirements may need a discussion instead. Estimates exclude VAT and remain subject to scope, capacity and acceptance checks.
What does a workable timetable look like?
Start with the earliest date that matters to the group, not just the UK filing deadline. Agree when the ledger closes, when accounts and supporting schedules will be ready, when the auditors will work and when management must resolve queries.
Illustrative situation: a UK sales subsidiary closes on 31 December and the overseas group needs reporting in February. Its later UK filing deadline does not remove that February dependency. The proposal should explain whether early group reporting and the later UK statutory audit are both included. This is a hypothetical example, not a client case study.
When might Accendo be the right fit?
Accendo is suited to groups seeking a partner-led UK audit and reporting relationship, with a clear split between local responsibilities and group requirements. We can discuss working alongside your existing overseas auditor or UK tax adviser.
If you need one international network to accept responsibility for every jurisdiction, specialist regulatory assurance or an immediate sign-off before records are ready, explain that at the outset. We will establish what we can responsibly undertake.
Discuss your UK subsidiary’s scope and deadlines or explore our UK subsidiary audit service.
Further guidance
- GOV.UK: Audit exemption for private limited companies
- Companies House: Company accounts and subsidiary exemptions
- FRC: UK accounting standards
Published 26 September 2026. General guidance; the appropriate scope and exemptions depend on the entity and reporting period.