On 9th 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 31st 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 info@finexpertiza.cy
*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).