Audit

Audit Exemption

In order to ease the administrative burden and compliance costs for small companies, the option of audit exemption is available. The detailed legislation is set out over sections 358 to 364 of The Companies Act 2014, as amended.

The exemption is available to private companies that are classified as "small". In order to be so classified, the company must satisfy at least 2 of the following criteria:

• turnover does not exceed €12 million
• balance sheet totals do not exceed €6 million
• average number of employees does not exceed 50

The above criteria are proportionately adjusted if the accounting period covers other than one year.

There are some other relevant conditions:

• In general the company must meet the size criteria for both the current and preceding year. However, if it met the criteria in the preceding year and was classified as small, it can retain the audit exemption even if the criteria are not met for the current year.
• A group company cannot be considered small unless the group as a whole qualifies as small, based upon the above criteria.
• A holding company that prepares group accounts cannot be considered small.
• A company involved in certain specified activities cannot be considered small. These are primarily banking, financial, insurance, or investment related activities.
• Annual Returns must be up to date and filed on time with the Companies Registration Office.
• If an Annual Return is filed late, the entitlement to audit exemption is lost for the 2 subsequent years, but not for the year of late filing.
• The members of a company have the right to object to the company availing of the audit exemption.

In order to avail of audit exemption the directors must pass a resolution to that effect and ensure it is properly recorded. There are also declarations by directors to be included on the face of the balance sheet regarding the entitlement to the exemption and the acknowledgement of obligations under the Companies Act 2014.

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