July Audit Newsletter
Welcome to the July edition of the Audit newsletter. This month we’re covering:
Sector Focus: Transportation & Logistics
Our firm is proud to serve a significant portfolio of clients in the transportation and logistics sector — one of the most dynamic and operationally complex industries in the economy.
By auditing a broad range of operators, from freight and haulage providers to warehousing, distribution, and multimodal transport businesses, we have developed a successful and client focussed approach to auditing entities in this sector based both in the UK and internationally!
If you would like to talk about a particular client or prospect, please reach out to Oliver White or Richard Lane.
Watch out for upcoming FRS 102 changes!
Significant changes are on the horizon for lease accounting under FRS 102, as part of the Financial Reporting Council’s periodic review of UK GAAP. The revised standard, expected to come into effect for periods beginning on or after 1 January 2026, will bring lease accounting more in line with IFRS 16, particularly by requiring most lessees to recognise lease liabilities and corresponding right-of-use assets on the balance sheet. This change will result in a considerable shift for many businesses that currently report operating leases off-balance sheet.
One key consequence of this revision is the increase in reported total assets and liabilities for affected entities. For companies with material leasing arrangements, particularly in sectors like retail, manufacturing, and transport, the recognition of right-of-use assets may lead to a significant rise in net assets. While this more accurately reflects the financial position of the business, it may also have unintended knock-on effects in areas such as banking covenants, performance ratios, and most notably, audit thresholds.
Under current Companies Act requirements, one of the audit exemption criteria is that a company must not exceed £5.1 million in total assets. The inclusion of lease assets on the balance sheet could push some previously exempt companies above this threshold, thereby triggering a statutory audit requirement. As a result, businesses that haven’t historically required an audit may need to prepare for more rigorous financial scrutiny and we must consider time sensitive audit issues such as stock takes.
We are currently working on a project to help identify clients who may be impacted by such changes, so watch this space!
Staffing update
Effective staff resourcing remains a priority as our workload continues to grow, and relief is on the way. Several new staff members will be joining the team over the next few months on top of those we have welcomed recently, giving us greater capacity during peak periods and easing pressure on current teams.
To keep resourcing aligned with real-time needs, Andrew Runicles will continue to chair the monthly Resource Meeting. This forum reviews capacity forecasts, upcoming engagements and crunch points, ensuring we match the right people to the right jobs. Managers are encouraged to keep Retain up to date so that the meeting can address issues proactively rather than reactively.
Above all, communication is critical. Before booking a staff member onto an assignment, managers must check Retain and speak with the staff member’s ‘home’ manager to confirm availability and avoid clashes. A quick call or Teams message can prevent double-booking, minimise last-minute reshuffles and help maintain a sustainable workload across the team.
That’s all for this month. As always, if you have any questions or suggestions, please don’t hesitate to reach out to Oliver White.
Have an amazing week everyone!