By Sinéad Floody, 10th February 2021
At the start of the 2000s, most Irish registered companies were required to file audited accounts as part of their Annual Return filed with the Companies Registration Office. Thankfully, things have evolved from then and since the Companies Act 2014 was commenced into law, the vast majority of companies in Ireland can now avail of the audit exemption. This article will explain how you can avail of the audit exemption, and most importantly – not lose your audit exemption which can be a costly mistake!
In order for a company to avail of audit exemption, the balance sheet of the company must contain a declaration to that effect made by the directors of the company, and the annual return itself must declare that an exemption is being claimed. Audit exemption is available for dormant companies and small companies.
A company is eligible if it meets at least two of the following requirements:
- A turnover that does not exceed €12 million
- A balance sheet that does not exceed €6 million
- An average number of employees that does not exceed 50
If a company is exempt, it shall instead annex a copy of its abridged financial statements which have been approved by the directors to the annual return.
Loss of Audit Exemption
Audit exemption for Irish companies can be lost if their annual return is filed late. This results in the company losing audit exemption for the next two years, regardless of the company’s trading activities. It is therefore important to keep on top of filing deadlines to avoid this costly burden. Please see our blog on Irish Company Annual Returns for more information on the annual return itself.
Medium and large companies who are not eligible for audit exemption may be required pursuant to Section 137 Companies Act 2014 to create an audit committee for the purposes of overseeing and monitoring the process.
You can verify your company’s size using the table below:
Turnover exceeding €40,000,000 is considered a Large company. If the company satisfies any two of the above elements, it will be that company size.
Limitations of Audit Exemption
Certain companies such as Public Limited Companies and Public Unlimited Companies cannot avail of audit exemption in any circumstances. Companies Limited by Guarantee can claim audit exemption unless an audit is requested by one member. A company with Charitable Status can claim audit exemption unless requested by one member, and so long as its turnover is below €100,000 per annum.
The Company Secretarial experts at Company Bureau assist many of our clients to meet the requirements and maintain Irish company audit exemption. If you have any questions or would like assistance with audit exemption for Irish companies please complete our Contact Form or call to speak with an expert on +353 (01) 646 1625.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.