Audit Exemption
All Private Limited Companies (with the exception of a private limited company not trading for the acquisition of gain) are required to attach audited accounts to their annual returns under the terms of the Companies Amendment Act, 1986. Under the terms of section 32 of the Companies (Amendment)(No.2) Act 1999 as amended by section 53 of the Companies (Auditing and Accounting Act 2003) companies that meet specific criteria were allowed to avail of an exemption from the requirement to have the accounts, which are appended to their annual return, audited.
A company type – private limited by guarantee without share capital – is not entitled to audit exemption and cannot change type in order to be eligible.
When can you claim your Audit Exemption?
A claim for audit exemption does not arise when a new company is filing its first annual return (required to be made up to the six-month anniversary of the date of incorporation) as no accounts are required to be attached to the first annual return. The haccp training, haccp course is something that can come handy when one wants to asses from within and improve their business. Audit exemption may be claimed however at the time of the company’s first annual return with accounts or when subsequent annual returns are being filed.
Conditions to be satisfied
The conditions to be satisfied (revised) before a company will be able to claim the exemption from the requirement to have its accounts audited are set out in section 32(3) of the 1999 Act (as amended by the Companies (Auditing and Accounting) Act 2003 and the Investment Funds Companies and Miscellaneous Provisions Act 2006) and are as follows:
In respect of the financial year concerned:
- The company must be a company to which the Companies (Amendment) Act 1986 applies i.e. a Private Limited Company;
- The amount of turnover of the company must not exceed €7.3 million;
- The assets of the company are less than €3.65 million at the end of its financial year;
- The average number of employees must not exceed 50;
- The company must not be a parent company or a subsidiary company;
- The company must not come within one of 19 classes of companies listed in the Second Schedule to the 1999 Act; Please see Attorney Generals website for Second Schedule
; - The company’s annual return, to which the accounts for the financial year in question are attached, must be furnished to the CRO in compliance with section 127 Companies Act 1963. This means that the return must be delivered to the CRO not later than 28 days after the company’s Annual Return Date, or where the return has been made up to an earlier date, within 28 days of that earlier date. i.e.it must not be late in the current year;
- Furthermore, where an annual return to which accounts for the immediately preceding financial year was delivered to the CRO, that return must also have been filed on time. i.e. it must not be late in the previous year;
- the year in question must be the current year – section 32 provides that the directors must be of the opinion that the company “will satisfy” the conditions – use of the future tense precludes the decision being taken in respect of a year that has already ended.
- A company which satisfies the revised exemption threshold levels in a current financial year, the year in respect of which the audit exemption is being claimed, must also have satisfied those revised threshold levels in the preceding financial year.
Unless the financial year in respect of which the audit exemption is being claimed is the first financial year of the company, the company must also have satisfied all the conditions set out in section 32(3) in respect of the preceding financial year. For instance, if the most recent company’s annual return with accounts was delivered late to the CRO or if the current years return is being delivered late, the company is not entitled to the audit exemption, notwithstanding that it may satisfy all the remaining conditions.
“Balance sheet total”, in relation to any financial year of a company, means-
- (a) Where Format 1 of the balance sheet formats set out in the Schdeule to this Act is adpoted by the company, the aggregate of the amounts shown in the company’s balance sheet for that year under headings corresponding to items A and B in the format,
- (b) Where Format 2 of those formats is adpoted by the company, the aggregate of the amounts so shown under “Assets”, and
- (c) Where the company prepares IFRA individual accounts, the aggregate of the amounts shown as assets in the balance sheet.