The exemption from the requirement for certain private limited companies to have accounts audited was first introduced in the Companies (Amendment) (No. 2) Act 1999, based on meeting specific criteria and companies falling within the scope of the Companies (Amendment) Act 1986. The Companies (Auditing and Accounting) Act 2003 and the Investment Funds, Companies Miscellaneous Provisions Act 2006 made amendments to the thresholds applying to the exemption from audit requirement. Companies who meet the relevant criteria are currently exempt from having their accounts audited where all of the following thresholds apply: turnover not exceeding €7.3m.; balance sheet total not exceeding €3.65m.; and average number of employees in the year not exceeding 50.
Companies organised as non-profit organisations, such as charities, residential management companies, sports clubs, trade associations and community or special interest groups are generally incorporated as companies limited by guarantee.
In 2009, the Company Law Review Group (CLRG) considered the case for extending the audit exemption to companies limited by guarantee. As outlined in its 2009 Annual Report, the Group recommended that: (i) Subject to consultation with the Minister for Community, Rural and Gaeltacht Affairs and the Charities Regulator, the audit exemption regime contained in Part III of the 1999 (No. 2) Act should be extended to such class or classes of companies limited by guarantee which are charitable organisations (within the meaning of the Charities Act 2009) so as to bring them into alignment with charitable organisations that are not companies, provided that 10% of the members with voting rights should be able to require an audit; and (ii) the audit exemption regime be extended to all companies limited by guarantee which are not charitable organisations, subject to a veto right, (i.e. that any one member who has the right to vote at general meetings of the company may veto the proposal to avail of the exemption), and further subject to the requirement that audit exemption in respect of the following year shall be an item on the agenda of the annual general meeting.
The recommendations of the CLRG in this matter will be considered in the context of the Companies Consolidation and Reform Bill, which is currently being drafted by the Office of the Parliamentary Council.