Members of the local accounting fraternity are mulling a decision on their support or rejection of a Government proposal to increase the threshold for company audits in Barbados.
Under the Companies Act audits are mandatory for companies with assets or revenue of more than $1 million and has remained at that level for the past 28 years.
Given inflation and growth in the economy over the years there is a strong argument that an increase in the threshold was now warranted.
The proposal to increase the threshold has been hotly debated by accountants. The Institute of Chartered Accountants of Barbados (ICAB) recently brought in British audit expert Dr Jill Collis to provide insight into the experience of Britain and its European counterparts.
According to a document prepared by ICAB, supporters of an increase in the threshold said Barbados’ major international business competitors including the British Virgin Islands, Cayman Islands and Bermuda, had no mandatory audit requirement other than for public companies, financial institutions and specifically regulated entities.
Proponents say that audit costs were burdensome on companies and “the benefits of enhanced financial reporting requirements . . . are arguably not as clear for small companies.”
Those who suggest that any increase in the audit threshold be moderated say filing accurate financial statements with regulatory authorities increased transparency and reduced opportunities to launder money.
“There may be a risk to Barbados’ reputation as a high quality international business jurisdiction that adheres to the highest standards,” this group noted. (GE)
