Companies Act 2014 - Audit Exemption

 

Prior to the implementation of the Companies Act 2014, a company had to satisfy three size criteria to qualify as a “small company” for the purposes of claiming an audit exemption. Under the Act, a company will be able to avail of the audit exemption if it can satisfy two out of the three tests:
  • balance sheet total of less than €4.4 million;
  • turnover of less than €8.8 million;
  • average number of employees less than 50.
In addition, audit exemption for smaller companies will now be available :
  • within groups
  • for dormant companies
  • for companies limited by guarantee.  
If one or more of the company’s shareholders representing not less than 10% of the voting rights (one member for a guarantee company CLG) request that the company not avail itself of the exemption and serve notice in writing to this effect on the company in the financial year immediately preceding the financial year concerned or during the financial year concerned but not later than one month before the end of that year, the company must have an audit.
 
If the Directors of a dormant company decide to claim audit exemption in respect of a financial year, they must make the decision in that financial year and record the decision in the minutes of the meeting concerned.
 
If a financial year has ended, the directors can still claim a small company audit exemption (but not a dormant company audit exemption).
 
If an annual return is filed late in the CRO, the company loses the entitlement to claim the audit exemption in the current year and in the following year.
 

 

 

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