Amendments to audit obligations of Cyprus companies

On 9^th June 2022 the House of Representatives passed an amendment to the Cyprus Companies Law, Cap. 113, aiming to ease financial reporting obligations for small and medium-sized private limited liability companies, with a purpose of reducing the administrative burden and giving the opportunity to companies, partnerships and self-employed persons that fall within the specified criteria to use an alternative assurance framework.*

Changes in the Companies’ Law, Cap. 113 enable companies in Cyprus that meet the specified criteria to proceed with a review of their financial statements, as opposed to a full audit. If a company still wishes to perform a statutory audit of their financial statements, regardless of whether it could choose the review option, it can continue to do so.

Determining the criteria for using a review engagement instead of an audit

To determine whether a Company may apply a review engagement instead of a statutory audit:

• the Company must be a private limited liability company (i.e., not a public limited liability company, not a public interest entity, and not subject to regulation and supervision by the Central Bank of Cyprus, the Superintendent of Insurance and the Cyprus Securities and Exchange Commission), and
• not be required to prepare consolidated financial statements or it is not a part of a group which required to prepare consolidated financial statements, and
• both its Net Turnover and Total Gross Assets should not exceed or should cease to exceed the criteria of €200,000 and €500,000 respectively, in two consecutive financial years.

It is applicable for the financial statements for the year ending 31^st December 2022 and thereafter.

For more information on the Amendments to audit obligations of Cyprus companies and how this may affect your business, please contact us on [email protected]

*International Standard on Review Engagements (ISRE) 2400 (Revised) Engagements to Review Historical Financial Statements as issued by the International Auditing and Assurance Standards Board (IAASB).