Companies that opt out of audits should use the savings to focus on business planning, according to Dave Darlaston, partner in the Midlands office of national audit, tax and advisory firm Crowe Clark Whitehill.
They needed to be better prepared and focused on the future, looking to innovate and seek new markets.
His comments came as the prospect loomed that the vast majority of SMEs will soon no longer be required to have an audit.
As part of changes to the EU’s Accounting Directive, member states have the option to increase the size of businesses that will no longer require audited financial statements to those with a turnover up to €12 million (£10.3 million) and a balance sheet up to €6 million (£5.04 million).
Currently companies are exempt from requiring an audit if they meet two out of three qualifying criteria – a balance sheet of less than £3.26 million, turnover below £6.5 million and fewer than 50 employees.
EU member states have until 2015 to implement the Directive, and the Government is expected to go out to consultation this year (2014).
Mr Darlaston said: “It seems very likely that implementation will take place given the past trend.
“It all began with the introduction of a £350,000 turnover threshold in 1993, rising to £5.6 million in 2004 and £6.5 million in 2008.
“But it is important not to throw the baby out with the bath water.
“Audits are essentially a good discipline – they show a firm exactly where it is, what is going well, what is not going so well, and highlights looming problems.
“Firms still need that sort of information whether they do it formally through an audit or not. They need to address issues before they become a major problem and need to consider what their margins are. Old markets fade away and new ones have to be found.
“We advise many businesses on everything from innovation to exporting.
“Wise businesses will not fritter away their audit savings, regarding them as some kind of windfall. They will re-invest in the businesses by seeking the expert advice which can take them forward. There is no substitute for forward planning.”
Mr Darlaston said that there are implications in not opting for audits.
Users of financial statements such as customers, suppliers and credit agencies are likely to be more sceptical of a company’s performance and prospects, which, in turn, could affect things like credit ratings and debt insurance.
He went on: “Conversely a business which has ploughed money into being a financially tight ship while at the same time looking to grow and make the most of opportunities will be viewed very differently.
“Well-run and well-advised companies will be looked on favourably.”