The audit regime has been made easier as under the Companies Act 2014 audit exemption is now available to small companies, parents and subsidiaries in small groups, companies limited by guarantee, certain unlimited companies and dormant subsidiaries.
The qualifying criteria for a small company are satisfied by a company in relation to a financial year in which it fulfils 2 or more of the following requirements:
| Small Company Thresholds | ||
| Turnover | €8.8 million | |
| Balance Sheet | €4.4 million | |
| Average No. Employees | 50 |
Unfortunately a company loses ‘small’ status if it does not satisfy these criteria for 2 consecutive years.
Important changes relating to financial statements include:
- The first financial year may only last for 18 months. Subsequent financial years must be no longer than 12 months and a company may only change the financial year end once every five years.
- There are new rules regarding revision of incorrect financial statements and how these are filed with the Companies Registration Office.
- Directors must now provide a statement in the Directors’ Report that there is no relevant audit information of which the company’s auditors are unaware.
- A new procedure is now available whereby directors can apply to the District Court to seek an extension for late filing the annual return and financial statements while retaining audit exemption and avoiding late filing penalties.
- For all companies with a turnover exceeding €25 million and a balance sheet total exceeding €12.5 million, the directors must include in the their Report a Directors’ Compliance Statement acknowledging their responsibility for securing compliance of the company with its legal obligations including certain company and tax legislation.
- The requirement to hold an E.G.M. to deal with a Section 40 loss of capital is no longer required for LTDs and DACs.
- All offences under the Companies Act have been categorised and category 1 and 2 offences must be reported by the company auditors to the ODCE.