Audit

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Fortunately for most small and medium-sized businesses the requirement of a costly annual audit is no more. The criteria that allow a business to avail of audit exemption are as follows:

Introduction

The Companies (Amendment) (No.2) Act 1999 introduced the concept of the audit exemption for companies. This was later amended by the Companies (Auditing and Accounting) Act 2003 and subsequently amended following enactment of Section 9, Investments Funds, Companies and Miscellaneous Provisions Act 2006.

Conditions

The 2006 Act became effective for accounting periods commencing on or after 24th December 2006. The revised conditions also apply to financial years which commenced prior to 24 December 2006 and ending on or after 24 February 2007.

The Act sets down a number of conditions that a company must fulfill before the exemption can be availed of. All conditions must be met (for the year and the preceding year).

The conditions are as follows;

  1. The company is a company to which the Companies (Amendment) Act 1986 applies (a company limited by guarantee may not avail of the exemption).
  2. The amount of the turnover of the company does not exceed €7,300,000 per annum.
  3. The balance sheet total of the company does not exceed €3,650,000.
  4. The average number of persons employed by the company does not exceed 50.
  5. The company is not a bank or insurance company.
  6. The company is not part of a group of companies.
  7. The company is up to date with its filing requirements.
  8. The company is not one of the following:
    • A stock broking company
    • An investment business company
    • A company that is engaged in the business of accepting deposits or other repayable funds or granting credit for its own account
    • A company that is an associated body of a building society within the meaning of the Building Societies Act 1989
    • A company that is an associated enterprise of a credit institution within the meaning of the European Communities (Consolidated Supervision of Credit Institutions) Regulations, 1992 (S.I. No. 396 of 1992)
    • An investment company within the meaning of Part XIII of the Companies Act, 1990
    • A company that is a management company or trustee within the meaning of Part XIII of the Companies Act, 1990
    • A company that is an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989)
    • A company that is a management company or trustee of an undertaking for collective investment in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989)
    • A company that is a management company within the meaning of the Unit Trust Act, 1990.
    • A company that is a general partner or custodian of an investment limited partnership within the meaning of the Investment Limited Partnerships Act, 1994.
    • A company that is an undertaking with close links with a financial undertaking within the meaning of the Supervision of Credit Institutions, Stock Exchange Member Firms and Investment Business Firms Regulations, 1996 (S. I. No. 267 of 1996)
    • Any other company, the carrying on of a business by which is required by virtue of any enactment or instrument thereunder, to be authorised by the Central Bank.
    • An insurance company
    • An insurance intermediary company
    • A company that is an accepted body within the meaning of the Trade Union Acts, 1871 to 1990.

Companies that do require audit e.g. companies that are part of a group, limited by guarantee or exceed the income/asset/employee thresholds will find our practice very competitive in our pricing structure.

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