Saturday, 18 March 2017

Audit Exemptions in Ireland

Audit Exemptions for Irish Companies

There are two audit exemptions available to Irish companies: the small company/group audit exemption (Companies Act 2014, s.360) and the dormant company audit exemption (Companies Act 2014, s.365). There are certain companies that are not eligible for the audit exemptions, for example, public companies, credit institutions, investment companies and insurance undertakings.

We shall look at these two exemptions in the rest of this article.


Small Company Audit Exemption

To avail of the small company audit exemption, a stand alone company must meet the following criteria:

  • The company must qualify as a “small company” for the current and previous year unless the company is newly incorporated – see below for information on the qualification
  • The company’s annual return must be filed on time for the current and previous year unless the company is newly incorporated
  • There must not be an objection by one or more member representing at least 10% of the voting rights regarding the utilisation of the audit exemption (or by one member if the company is a company limited by guarantee)

Thresholds to Meet to Qualify as a Small Company

A company must not exceed two of the three following thresholds for two consecutive years unless the company is newly incorporated. Please be advised that the thresholds will be increased when the Companies (Accounting) Bill 2016 (Bill) is enacted. It is expected that more companies would be able to avail of the audit exemption for small companies when the Bill is enacted.


Current thresholds

Revised thresholds when Bill is enacted

Balance sheet total






Average number of employees




Dormant Company Audit Exemption

A company might not meet the thresholds to be classified as a small company but can still avail of the dormant company audit exemption if it meets certain conditions.

1. The directors of the company must be of the opinion that the company satisfies the following conditions for the year considered to avail of the dormant company audit exemption:

    • The company has no significant accounting transactions – see below for certain transactions that are disregarded; and
    • Its assets and liabilities comprise only permitted assets and liabilities, i.e. investments in shares of, and amounts due to or from, other group undertakings.

2. The directors decide to avail of the dormant company audit exemption and records that decision in the minutes of the meeting concerned.

In determining whether or when a company is dormant for the purposes of the audit exemption, the following transactions shall be disregarded:

(a) Any shareholder transactions; and
(b) Any transaction consisting of the payment of a fee to the Registrar on a change of the company’s name, re-registration of the company, or the registration of an annual return.



More companies are expected to be able to avail of the small companies audit exemption when the Bill is enacted. However, there are still certain small companies who are required to have their financial statements audited due to other legislation or requirements of stakeholders.

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