Auditing requirements for co-operative and community benefit societies

Check to see if your accounts need to be audited.

We provide guidance on accounting and audit requirements for co-operative societies and community benefit societies. You can also use our decision tool below to help you understand whether you are required to appoint a qualified auditor. You can of course choose to appoint a qualified auditor even if you not required to do so.

Read more about annual returns and accounts.

Types of society

Societies qualifying as ‘small societies’ can appoint 2 or more ‘lay auditors’ (people who are not qualified auditors).

Other societies are required to appoint a qualified auditor unless members vote each year to disapply this requirement. However, not every society is eligible to invite members to vote to disapply the audit requirement. 

The audit requirements depend on criteria including the number of members you have, your turnover, and your assets. So whether you need to appoint a qualified auditor may change from one year to the next.

Whether you have, or are, a subsidiary affects the audit requirements. You can read more about the impact of subsidiaries.

Types of audit

Societies may be able to do one of the following:

  • appoint 2 ‘lay auditors’  
  • no audit
  • appoint a qualified auditor to produce a ‘report on the accounts’
  • appoint a qualified auditor to audit the accounts and balance sheet

Read more about annual returns and accounts.

Audit decision tool

This tool is to help co-operative societies and community benefit societies understand whether they may need to appoint a qualified auditor. The tool navigates through the requirements of the Co-operative and Community Benefit Societies Act 2014, reflected in our guidance.

Some societies may be under other legislative requirements that affect whether they need to appoint an auditor. Examples include the requirements for housing associations or financial service firms. This tool does not cover requirements outside of the Co-operative and Community Benefit Societies Act 2014.

If you are in any doubt on the requirements that apply to you, seek advice.

Answer the questions below to help you understand which requirements apply.

Are you a registered social landlord in Scotland?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Do you have or are you a subsidiary?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Do you hold deposits (other than withdrawal share capital) under the Financial Services and Markets Act 2000?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Do your rules allow for unaudited accounts?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Are your receipts and payments in the previous year below £5,000?

Did you have less than 500 members in the previous year?

Was the value of assets in the preceding year below £5,000?

  • You can appoint 2 or more lay auditors.

Were your assets in the previous year below £5.1m?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Was your turnover in the preceding year below £10.2m?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Are you a charity? ’Charity’ includes both exempt and registered charities.

Was a member resolution passed with fewer than 20% votes cast against?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Was your gross income for the previous year below £250,000?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Did votes against equate to less 10% of society total membership?

  • You must appoint a qualified auditor to audit your accounts and balance sheet.

Was your turnover in the preceding year below £90,000?

  • You can produce unaudited accounts.

  • You must appoint a qualified auditor to produce a report on accounts.

Finding a qualified auditor

We provide more information on finding a qualified auditor.