In our last article we covered what to expect from the annual company audit. In this article we will look at the exemption from audit available to certain companies.

All companies are required to attach audited accounts with the annual return to the Companies Registration Office (CRO) under the terms of Companies Amendment Act, 1986. The Companies Act was later amended to allow companies that meet certain criteria to avail of an exemption from the requirement to have the accounts, which are attached to the annual return, audited.

You will see below that the Companies Act 2014 which will come into effect this June will alter some of these criteria, but we will discuss this in greater detail in our next article.


To avail of audit exemption, a company must satisfy all the conditions set out below for both the current and preceding year:

  • The turnover must not exceed €8.8 million.
  • The Balance Sheet total of the company at the end of the year is less than €4.4 million.
  • The average number of employees must not exceed 50.
  • The company must not be a parent company or a subsidiary company.
  • The company’s annual return for the current and prior year must be submitted to the CRO within 28 days of the Annual Return Date (ARD).
  • The company must not come within one of the 19 classes of companies listed in the Second Schedule to the 1999 Act.
  • The company is a company to which the Companies (Amendment) Act 1986 applies (a company limited by guarantee may not avail of audit exemption).


It should be noted that where a company is late filing its annual return for the current year, the company loses its entitlement to claim audit exemption for both the current and the preceding year. The company may only re-apply for audit exemption in the third year.


A company wishing to claim audit exemption must apply for the exemption within the financial year they wish to claim it for. A claim for audit exemption cannot be claimed after the financial year end has passed. The steps below should be followed to claim the exemption:

  • The directors of the company must be satisfied that the company is entitled to avail of the exemption from audit. They must consider the Memorandum and Articles of Association and third party reporting requirements. The decision must be recorded in the minutes of the directors’ meeting.
  • The directors must serve notice on the auditor outlining their decision to avail of audit exemption and terminate their appointment as auditors.
  • The auditor within 21 days of receiving this notice must serve notice on the company detailing whether any circumstances exist that should be brought to the attention of the creditors or shareholders.
  • The auditor within 14 days of sending this notice must send a copy of the notice to the CRO.


The Companies Act, 2014 came into law on 23rd December 2014 and will commence on 1st June 2015. The Act changes the qualifying conditions for audit exemption from having to meet all of the three criteria below to only having to meet two out of three criteria:

  • Turnover of the company must not exceed €8.8 million.
  • The Balance Sheet total of the company at the end of the year must not exceed €4.4 million.
  • The average number of employees must not exceed 50.

The Act introduces audit exemption for dormant and group companies where they meet certain qualifying criteria laid down in the Act.

The Companies Act 2014 aims to make it easier and more efficient for a company to do business in Ireland. Join us in our next article where we will highlight some of the key changes introduced by the Companies Act 2014 that may affect your organisation.