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Audit Exemption Rules

  • 14-11-2008 1:49pm
    #1
    Peter B
    Registered Users, Registered Users 2 Posts: 1,086 ✭✭✭


    Anyone know that makes a "subsidiary company" for audit exemption?

    If company A has 1,000 issued shares where 999 shares are all held by individuals and 1 share is held by company B, does that make company A a "subsidiary company" of company B and therefore need to be audited?


Comments

  • #2
    whatawaster
    Registered Users, Registered Users 2 Posts: 12,910 ✭✭✭✭whatawaster


    Peter B wrote: »
    Anyone know that makes a "subsidiary company" for audit exemption?

    If company A has 1,000 issued shares where 999 shares are all held by individuals and 1 share is held by company B, does that make company A a "subsidiary company" of company B and therefore need to be audited?

    A subsidiary, in general, is a company in which the parent company owns more than 50% of the ordinary shares. This is clearly not the case here.
    However if Company B controls more than 50% of the voting rights, or controls the operating and financial properties of Company A, then A will be classed as a subsidiary.
    I'm not 100% sure on this, but if the 999 shares in company A are owned by the shareholders in company B, then they, in substance anyway, a subsidiary, and may not have an audit exemption.

    It's not really about how many shares Company B owns. It's about control. If they have the power to control A, then A is a subsidiary.


  • #3
    Hanley
    Banned (with Prison Access) Posts: 21,981 ✭✭✭✭Hanley


    Peter B wrote: »
    Anyone know that makes a "subsidiary company" for audit exemption?

    If company A has 1,000 issued shares where 999 shares are all held by individuals and 1 share is held by company B, does that make company A a "subsidiary company" of company B and therefore need to be audited?

    If this was the case, any company with traded shares would be a defacto subsidiary company because pension companies, funds etc would hold shares in them....


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