Update July 2022
Exemptions from statutory audit requirement
s in Cyprus for small companies
An important update to the Cyprus Companies Law, Cap 113, has been introduced on 9 June 2022, with the aim of freeing small size companies (as defined) from the heavy burden of compliance with the ISAs (International Standards on Auditing) by exempting them from the statutory audit, which until now was universally required (the Companies (Amendment No.2) Law of 2022 (the ‘’Law’’).. Instead, these companies will be subjected to another simpler type of assurance engagement under different, much less demanding standards.
This amendment, which had been awaited and in the making for very long time, and became active upon publication in the Cyprus Gazette on 24 June 2022 is summarized below.
Companies may submit their financial statements for review instead of audit, by a statutory auditor or statutory audit firm, performed according to the International Standard on Review Engagements (ISRE) 2400, when the company’s net turnover does not exceed the amount of €200,000 and the total value of the assets (gross, not net, i.e. without deducting liabilities) does not exceed the amount of €500,000. It is anticipated that these initial thresholds, which had been the subject of most of the bill’s debating, are likely to be re-visited in the near future and re-considered in the light of early application experience with a view to revising them upwards, so that more companies are enabled to escape the full ISA audit requirement.
It is important to note that the Law includes specific exceptions, notably for companies that are subject to regulation and supervision by certain independent authorities, for parent companies that are required to prepare consolidated financial statements, for subsidiaries whose parent company must prepare consolidated financial statements, and others.
The above is applicable from the 1st of January 2023 for financial statements ending on or after 31 December 2022.
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The contents of this publication should be considered to be of a general nature only not referring to any particular business. Before proceeding with any action, please request further advice relating specifically to your business. We will be very pleased to be of assistance.