Some companies may be attracted by the prospect of reduced professional fees, through dispensing with an audit; however, consideration should first be given to various other factors:
- The confidence an audit gives directors as to the accuracy of the reported financial figures;
- The credibility an audit report gives to the financial statements (to shareholders, lenders, the Revenue, prospective purchasers, etc);
- The business and financial advice that auditors are able to give as a result of the detailed examination of systems;
- The affect an audit has on deterring and detecting fraud.
If an audit is not required by law or other reasons, statutory financial statements disclosing the company’s transactions for the year still need to be prepared and submitted to Companies Registration Office. We can provide this service, in isolation from an audit, at two different levels:
- Accounts Preparation only;
- Independent Professional Review, providing a level of assurance and opinion, on specifically targeted aspects of the accounts, at a level of assurance lower than that given from a full audit.
Can all types of company avail of the audit exemption?
The following companies are not entitled to the exemption:
- Public Limited Companies, Public Unlimited Companies and Investment Companies
- A credit institution or insurance undertaking
- A company referred to in the fifth schedule of the Companies Act 2014
My company is not disqualified under any of the above headings; can it avail of the audit exemption?
In order to avail of the audit exemption, the company must satisfy two or more of the following conditions, both in respect of the current financial year concerned and the preceding financial year, unless the year in respect of which the exemption is being claimed is the company’s first financial year:
•the company is a company to which the Companies Act 2014 applies;
•the company has turnover of less than €12 million during its financial year;
•the balance sheet total of the company is less than €6 million at the end of its financial year;
•the company has an average of less than 50 employees for the year.
Even if a company meets the required conditions in respect of its current financial year (and where the company had a previous financial year, the company also met those conditions in respect of that year), it will be unable to file unaudited accounts for the financial year concerned with its annual return unless it files that return on time with the Companies Registration Office and the return to which the company’s accounts for its preceding financial year were attached was also filed on time with the Companies Registration Office.