22 February 2023,
Amendments to Cyprus Companies Law – Choice for a Review Engagement instead of an AUDIT.
Applicable for reporting periods ending on or after 31 December 2022
On 9th of June 2022, the House of Representatives passed amendments to the Companies Law.
According to the amendments of the Companies Law, companies may submit their Financial Statements for Review instead of Audit, by a Statutory Auditor or a Statutory Audit Firm, according to the International Standard on Review Engagements 2400, when the Company’s Net Turnover does not exceed €200,000 and the total value of the assets without deducting liabilities does not exceed the amount of €500,000.
In more detail the Company should meet the below criteria in order to be eligible for a Review Engagement instead of an Audit:
- As mention above both the Company’s Net Turnover and Total Gross Assets should not exceed or ceased to exceed the criteria of €200,000 and €500,000 respectively, in two consecutive financial years.
- The amended law provides that “Net Turnover” includes the Net Turnover as defined in the provisions of the Companies Law Cap.113, as well as income from Rental Income, Interests, Dividends and Royalties.
- 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).
- The Company is not required to prepare consolidated financial statements or it is not part of a group which required to prepare consolidated financial statements.
1) The entities that choose a review engagement instead of an audit they will continue to be subject to the below requirements:
ii. The prevention and Suppression of Money Laundering Activities Law.
iii. Filing requirements to the Registrar of Companies as in the case of audited financial statements as per the Companies Law, Cap. 113
iv. Relevant tax requirements of the Tax Department, i.e., IR4 & IR1.
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