Why it's happening to so many companies
Fewer firms do audits every year. 430 firms gave up their audit registration in 2024, against 172 new applications, and the number of registered audit firms in the UK and Ireland fell from 5,007 in 2020 to 3,760 in 2024. It fell again in 2025, by 9%, to 3,421.
A lot of them are small practices whose audit partner is retiring, or who have decided the regulation and training that come with audit registration aren't worth it for a handful of audit clients. Others have merged into larger groups that don't want smaller audits. Whatever the reason, the company ends up needing a new auditor, usually with a year end not far away.
What your outgoing auditor has to do
An auditor leaving office sends the company a statement under section 519 of the Companies Act. For most private companies it will simply say there is nothing members or creditors need to know. If it does raise something, the company has to send it to its members or apply to court, and the auditor files it at Companies House.
The auditor either resigns in writing or doesn't seek reappointment when its term ends. Either way, the directors can appoint a new auditor to fill the gap until the members next appoint one.
Want to talk it through? Tell us about the company and speak to the audit team. The budget and timetable are agreed before any work starts.
Talk to usWhat to do next
- Check when your next year end isThe new auditor needs to be in place before it, so they can plan the work and attend any stock count.
- Gather the basicsThe last signed accounts, the most recent management accounts, any loan or investor agreements that mention the audit, and your group structure if there is one.
- Talk to a new firmMeet the partner, agree the team and the timetable, and get the fee in writing.
- Let your outgoing auditor knowThey'll be asked, with your permission, whether there's any professional reason the new firm shouldn't take over, and for access to their file.
- Make the appointmentA board minute appointing the new auditor, followed by an engagement letter for the directors to sign.
If your accountant has been your auditor too, you can keep them for the accounts and tax. Only the audit has to move.
Questions
Do we have to find a new auditor before the old one leaves?
Ideally, yes, or soon after. The directors can appoint a new auditor to fill a vacancy, and the members confirm the appointment at the next opportunity. What matters most is having someone in place before your next year end, so they can plan the work and attend the stock count.
Will the new auditor need our old files?
Usually. With your permission, the new firm asks the outgoing firm for access to the previous year's audit file. It helps with the opening figures and keeps the first year simpler for you.
Can our current accountant keep doing our accounts and tax?
Yes. Plenty of companies keep their accountant for the accounts and tax and use a separate firm for the audit. The audit firm needs to be independent of whoever prepares the accounts, so the split is common.