Exemptions from Statutory Audit Requirements for Small Companies
The Cyprus Companies Law provides certain exemptions from the statutory audit requirement for qualifying small companies, reducing the administrative burden on businesses that meet the prescribed criteria.
Instead of a full statutory audit performed under the International Standards on Auditing (ISAs), eligible companies may have their financial statements reviewed by a statutory auditor or statutory audit firm in accordance with the International Standard on Review Engagements (ISRE) 2400.
This simplified assurance engagement offers a more proportionate reporting framework for qualifying small entities while maintaining an appropriate level of professional assurance.
Who qualifies?
A company may qualify for a review engagement instead of a statutory audit where it satisfies the applicable legislative thresholds.
Currently, the principal financial thresholds are:
- Net annual turnover not exceeding €300,000.
- Gross assets not exceeding €500,000.
These thresholds should be assessed in accordance with the relevant provisions of the Cyprus Companies Law and any subsequent legislative amendments.
Exceptions
The exemption does not apply to certain categories of entities, including, among others:
- Companies regulated or supervised by independent regulatory authorities.
- Parent companies required to prepare consolidated financial statements.
- Subsidiaries whose parent company is required to prepare consolidated financial statements.
- Other entities specifically excluded under the applicable legislation.
Companies should therefore carefully assess whether they qualify for the exemption before deciding to replace a statutory audit with a review engagement.
How UHY Can Help
Determining whether a company qualifies for an audit exemption requires careful consideration of the applicable legislation and the company’s specific circumstances.
Our experienced team can assist businesses in assessing whether they qualify for a review engagement, advising on the applicable reporting requirements and providing both statutory audit and review services in accordance with the relevant professional standards.
For more information on how we may assist you, please contact us at uhy@uhy.com.cy or call +357 22379210.
The contents of this publication are provided for general information purposes only and should not be regarded as legal, tax or professional advice. Specific advice should always be obtained based on your particular circumstances before taking any action.