Confusion over FSA's role in supporting brokers with appeal to DTI
Small brokers have called on the FSA, Biba and the IIB to lobby the government to reinstate their exemption from external auditing.
Under the Companies Act, small companies with a turnover of under £5.6m and a balance sheet total of not more than £2.8m had been exempt from the need to submit audited accounts.
But since 14 January 2005 brokers have been required to have an external audit conducted every 12 months, leading to spiralling accounting costs.
Any reinstatement of the exemption would require a change in legislation and is therefore a decision for the DTI.
Allan Gambles, compliance manager of Coversure, a chain of small brokers, said: "Some of our brokers have seen their accounting costs treble from £2,000 to £6,000 as a result of the need for external auditing.
"As far as I am aware this has not been publicised by the FSA, Biba or the IIB.
I think the FSA is in a better position to influence the DTI than we are."
An FSA spokesman said it was considering the case for reinstatement and would work closely with the DTI to see whether any movement was possible.
But a DTI spokeswoman said: "If the FSA presented us with a case to re-apply the exemption for some firms we would carefully consider that. To my knowledge that hasn't happened."
Biba's Steve White said: "If there is widespread belief among our members that there should be an investigation into the original exemption we would support them. If there is a fight to be had we will have it."
