Annual Company Audit

itsonlyme

Hi All, just have a query.....


Is it Compulsory that all private limited companies get an annual audit done of their year end accounts for the trading year.?

swanvill

Hi,

Small companies can claim for an audit exemption. Please read the following link below for the information on who and how to qualify.

http://www.cro.ie/ena/annual-return-audit-exemption.aspx

Swanvill

cosecretary

Private companies may qualify for an audit exemption.


With regard to qualifying for the audit exemption I have outlined below the main requirements. Just to note that the requirements must also have been met in the preceding financial year in order for company to be able to claim the exemption:-

• 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,
• The company's annual return, to which the accounts for the financial year in question are attached must be filed before filing deadline

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.

If you do meet the above requirements a board meeting should be convened to resolve to claim the audit exemption. You should then notify the auditor (if one has been appointed) of your intention to claim the audit exemption. The auditor will then resign from his position and file a copy of the resignation letter with the Companies Registration Office.

It is important to note that there are a number of other issues which you should consider before deciding whether or not to avail of the audit exemption for eg:-

• If the Company is likely to be looking for additional finance in the future the bank may request sight of audited accounts as reassurance as to the financial position of the Company. It is also important to consider existing banking arrangements as certain banking agreements may require the company to prepare audited accounts.
• An audit can help to protect against fraud and can provide assurance to the directors that the internal controls and systems in place are sound and there are no material misstatements in the accounts
• The audit promotes and helps to maintain the confidence and integrity of the business and provides assurance as to the credibility of the financial statements for stakeholders such as suppliers, customers and employees
• If the Company is ever being sold or if further investors are ever being sought a history of audited accounts may be required

itsonlyme

Thanks for that info guys!!!!

It has answered alot of questions.


Audits cost so much money.... they are a rip off!!!

But yet a necessary evil.