Exemptions from Statutory Audit Requirements in Cyprus for Small Companies
An important amendment to the Cyprus Companies Law, Cap. 113, was introduced on 9 June 2022 with the aim of reducing the compliance burden for qualifying small companies by exempting them from the requirement to undergo a statutory audit in accordance with the International Standards on Auditing (ISAs). Instead, qualifying companies may be subject to a simpler assurance engagement performed under the International Standard on Review Engagements (ISRE) 2400.
This amendment, which came into effect upon its publication in the Cyprus Gazette on 24 June 2022, represented a significant development in the reporting requirements for small companies in Cyprus. The principal provisions are summarised below.
Companies may submit their financial statements for review, instead of a statutory audit, by a statutory auditor or statutory audit firm, performed in accordance with the International Standard on Review Engagements (ISRE) 2400, where the company’s net turnover does not exceed €300,000 and the total gross value of its assets (before deducting liabilities) does not exceed €500,000.
The increase in the turnover threshold allows a greater number of small companies to benefit from the review engagement framework, reducing compliance costs whilst maintaining an appropriate level of independent assurance.
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, parent companies that are required to prepare consolidated financial statements, subsidiaries whose parent company is required to prepare consolidated financial statements, and certain other categories of companies.
The above provisions apply to qualifying companies in accordance with the applicable provisions of the Cyprus Companies Law and the relevant legislation in force.
How Cosmoserve Can Help
Determining whether a company qualifies for a review engagement instead of a statutory audit requires careful consideration of the applicable legislation and the company’s individual circumstances.
Cosmoserve can assist with:
• Assessing whether your company qualifies for the audit exemption provisions.
• Advising on the applicable reporting and assurance requirements.
• Preparing financial statements in accordance with the relevant standards.
• Providing statutory audit or review engagement services through our experienced professionals.
• Assisting with ongoing accounting, tax and corporate compliance matters.
With decades of experience assisting both local and international businesses, Cosmoserve provides practical, reliable and commercially focused advice to help clients meet their accounting, audit and regulatory obligations.
Contact Cosmoserve
If you would like to discuss the audit requirements applicable to your company or require assistance with your financial reporting obligations in Cyprus, our experienced team would be pleased to assist.
Email: consult@cosmoserve.com
The contents of this publication are provided for general information purposes only and do not constitute legal, tax or professional advice. Specific advice should always be obtained based on your individual circumstances.
