The Companies Act 2014 has introduced a number of cost saving measures which included the extension of the scope of audit exemption provisions for companies that meet certain criteria.
An audit exemption was introduced some years ago which enabled certain private limited companies to avail of this option for the first time. The Companies Act 2014 has extended the scope of this exemption to additional types of companies and your company may qualify.
Although a company still has to file accounts in the Companies Registration Office, an audit exemption has benefits for a business: savings are likely to be made in relation to the time and costs that were taken up in the preparation of annual accounts and dealing with the audit process.
The Companies Act 2014 allows the following additional types of company to qualify for an audit exemption:
If your company meets certain criteria, an audit exemption may be an option.
A company must qualify as a small company in respect of a financial year by meeting two of these criteria:
The company must qualify as a small company as above and the group must then qualify as small by meeting two of these following criteria:
Notwithstanding the above criteria and no matter which category your company falls under, the most important requirement for audit exemption eligibility is for your company to file its annual return on time every year. Under the Companies Act 2014, this requirement has been extended to include a company’s first annual return.
With the year end audit for 2016 about to commence for many companies, it may be a good time for directors to consider whether or not their company qualifies for audit exemption. This exercise should be undertaken in advance of the commencement of the audit in order to avoid any unnecessary costs and to allow the company to benefit from the cost saving changes contained in the Act.