Choosing and appointing a company auditor

A company's accounts come round once a year, and for some companies an audit comes with them.

When a company needs an audit, someone has to pick the auditor and appoint them in the right way. This page covers how that works for a private limited company in the UK, under the Companies Act 2006.

Whether the company needs an audit

Many small private companies can claim an exemption from audit. For financial years beginning on or after 6 April 2025, a company may qualify if it meets at least two of three tests.

Turnover of no more than £15 million.
Assets of no more than £7.5 million.
50 or fewer employees on average.

Some companies need an audit whatever their size. Public companies and authorised insurance companies are among them. Shareholders holding at least 10% of the shares can also ask for an audit in writing. Their request has to reach the company at least one month before the end of the financial year.

Who can be the auditor

A statutory audit has to be carried out by a person or firm that belongs to a recognised supervisory body. They also have to be eligible under that body's own rules.

Four bodies supervise UK auditors. They are the ICAEW, ICAS, ACCA and Chartered Accountants Ireland.

Anyone can look up a firm or an individual on the public Register of Statutory Auditors. When it was updated on 16 October 2026, it listed 2,292 audit firms. You can search by the firm's name or its registration number.

The Financial Reporting Council oversees audit regulation in the UK. It sets the auditing standards and the Ethical Standard that auditors work to.

Keeping the auditor independent

The law keeps the auditor at arm's length from the company. An officer or employee of the company cannot act as its auditor. Nor can a partner or employee of such a person.

The rule reaches across a group of companies too. A director of the parent company, or of another company in the same group, cannot audit the company.

Making the appointment

A private company appoints its auditor for each financial year. The directors can make the first appointment. They can also fill a vacancy partway through a year.

After the first year, the shareholders normally appoint the auditor by ordinary resolution. They do this within a set window each year. The window closes 28 days after the deadline for sending out the previous year's accounts, or 28 days after the accounts go out, whichever is earlier.

Whoever makes the appointment also settles the fee. Shareholders fix it by ordinary resolution, or agree how it will be fixed. When the directors appoint the auditor, the directors fix the fee.

Reappointment each year

An auditor of a private company can carry on from one year to the next without a fresh vote. If the window closes and nobody has been appointed, the law treats the existing auditor as reappointed.

This automatic reappointment has limits. It does not apply if the directors made the original appointment, or if the company's articles require a fresh vote. Shareholders with at least 5% of the voting rights can also stop it. Their notice has to reach the company before the end of the accounting period.

Changing auditor

Shareholders can remove an auditor at any time. They do it by ordinary resolution at a meeting, after giving special notice.

An auditor who leaves will often have to send the company a statement of their reasons. The statement gives the auditor's registration number. It also sets out anything the auditor thinks the shareholders or creditors should know about the departure.