Exa Consulting Limited adds value to our clients reporting by providing independent audit and assurance services, designed to enhance the reliability and accuracy of the information presented in the Financial Statements.
Our audit methodology is tailored to suit the size and business environment of our clients. It focuses on understanding the business and risks of our clients in a cost-efficient manner. The experienced staff as well as our paperless working file system contribute significantly to the efficiency of our work.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal controls relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the financial statements.
Important considerations with regards to Audit:
The most important element of audit is the audit planning stage. When each particular client is analyzed in detail, risks highlighted, areas of potential concern recorded and materiality ascertained.
To give an example of the audit procedures on Balance Sheet accounts. The major factor that is of upmost importance is bank and cash balances. Balances at year end have to be correct, basically this means that the balance of your Bank Statement should be reconciled with the balance in your books.
To comply with this, we ensure that the balance is certified in writing by the banks, as well as further certificate completion is being obtained from the banks, where the company holds its accounts in, as at the close of business at each financial year-end. The completed certificate will form part of the audit evidence to be obtained by the auditors in arriving at the conclusions on which to base audit opinion on our client’s financial statements. This bank request is in accordance with the International Auditing Practice Statement on Bank Confirmations and is in the standardized format agreed with the Banking Council.
Additionally, we require that Directors/Shareholders sign a declaration identifying any indebtedness to or from the company. Trade receivables and trade payables reconciliations are performed by obtaining independent third parties’ statements of the accounts with the company. Differences are being recognized if any, and further investigated. Related parties’ balances is an area which is always of importance, especially for if fall within the materiality levels established during the audit planning stage. Non-current assets including intangible assets like: goodwill, intellectual property, software, – are also an area, which will need certain audit procedures to be in place.
The set of audited financial statements is comprised of:
As a member of the European Union (EU), Cyprus is subject to the accounting, auditing and financial reporting requirements established in EU Regulations and Directives as transposed into national laws and regulations.
The Companies Law Cap.113 sets the requirements for the preparation of corporate financial statements in Cyprus and transposes the EC Accounting Directive (2013/34/EU). The Companies Law requires all entities to apply EU-endorsed IFRS in their consolidated and separate financial statements. Exemptions from consolidation apply for small and medium-sized entities except where any affiliated enterprise is a public-interest entity or where the obligation to prepare consolidated financial statement arises under other legislation.
The Companies’ Law was (“Basic Law”) was amended by the Law 97 (Ι) of 2016, as published in the official gazette of the Republic on 23 September 2016 (the “Amending Law”). The provisions of the Amending Law are the result of the transposition of the EU Accounting Directive (2013/34/EU) into domestic law.
The purpose of this Technical Circular is to provide guidance on the principal changes emanating from the aforesaid revised Law. It is noted that the circular does not serve as comprehensive listing of all pertinent requirements and, accordingly, should be read in conjunction with the underlying Law.
It is hereby pointed out that small/dormant companies are from now on subject to statutory audit, as the exception that existed in the Law has been abolished.
For more information and/or advice, feel free to contact us via email at [email protected]