My responsibilities are in respect of statutory audit as required by EU law or national law in respect of small companies.
A statutory audit is a legally required review of a company’s financial statements. A statutory audit provides stakeholders such as creditors, investors and employees, with an independent opinion on the accuracy of the company’s accounts.
Under the Companies Act 2014, all companies are required to undertake a statutory audit of their financial statements. However small companies may avail of an exemption from the requirement to carry out an audit.
The Companies (Accounting) Act 2017 simplified and reduced the financial reporting obligations on small and micro sized companies. It also raised the thresholds for qualification as a small company, so more companies can now qualify for the audit exemption. These upper limits are the highest permitted under EU law.
To qualify as a small company it must satisfy two of the following 3 criteria
- Balance sheet total not exceeding €6m
- Turnover not exceeding €12m
- Employees not exceeding 50
Where community co-ops and social enterprises are registered companies then they would be required to adhere to the rules of the Companies Act 2014 and this includes being able to avail of the exemption from statutory audit on the basis of their size.
If community co-ops and social enterprises do not fall within this segment and there are specific statutory obligations arising for them deriving from responsibilities they assume on foot of receiving public funding from Government Departments and agencies, then the streamlining of audit requirements in this case would be a matter for the relevant Department overseeing the funding concerned.